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Credit cards still pave the way to financial freedom for Gen Z
For years, buy now pay later (BNPL) services were the easy choice for Gen Z. With flexible instalments, quick approvals and in-app checkout, they matched young consumers’ digital habits perfectly. But now that’s changing.
According to TransUnion’s latest South Africa Industry Insights Report, Gen Z accounted for nearly 18 percent year on year growth in new credit card accounts in 2023. This makes credit cards one of the fastest growing financial products for this generation. It’s a sign that the youngest earners in the credit market are moving beyond short-term payment apps and choosing tools that support longer-term stability.
Credit versus BNPL
Credit cards are recognised by major credit bureaus, making them essential for building the kind of credit record banks and lenders trust. For young professionals looking to buy a car, apply for a home loan or rent an apartment, a good credit record makes all the difference.
“Using credit cards helps generate a credit score, putting you on the map with banks and bureaus,” says Tracy Afonso, Executive, Private and Wealth at Nedbank. “Poor credit management can hurt you later on, especially when you apply for big things like a car loan or mortgage. When used wisely, credit cards help you build a financial profile that lenders recognise. That’s why we are seeing them make a comeback.”
BNPL options became popular during the pandemic, but many consumers are now juggling multiple payment plans across different apps, often without clear visibility of their total debt. Because these transactions do not always appear on credit reports, users miss the chance to build a healthy credit profile and risk overcommitting without realising it, leaving them financially exposed.
In South Africa’s high-risk environment, where household debt is on the rise, affordable credit and consistent repayment are especially important. Paying on time builds reliability and can lead to better interest rates and more favourable lending terms in the future.
Benefits that go further
Credit cards offer more than convenience. They reward smart spending with cashback, loyalty points, reward programmes and discounts on travel, entertainment or technology.
“Cards give cashback on everyday spend, discounts on purchases, and benefits like travel insurance, airport lounge access and concierge services,” Afonso says. “Some premium cards even adapt rewards to your lifestyle and spending habits, which appeals to users looking for flexibility and value.”
Credit cards also accepted globally. Whether you are booking a flight, paying for accommodation, shopping online or freelancing abroad, credit cards provide security and accessibility almost anywhere.
Smart management is key
Of course, credit must be managed carefully. Debt can build up quickly, and around 12 percent of South African card accounts are already three months or more behind on payments.
“Credit cards can offer real long-term benefits, but they need to be managed carefully and with discipline,” says Afonso. “Keep balances low, pay on time, and avoid treating the card as extra income.”
To stay in control, she advises young professionals to consider working with a private banker who can guide them in managing their finances responsibly. “With the right advice, a credit card becomes a financial tool that supports your goals and strengthens your overall financial position,” she says.
If you’re a young professional thinking about getting a credit card, compare you options to see what works in your favour. Look at credit limits, interest free periods, fees and loyalty programmes. Check for added perks like purchase protection, extended warranties or automatic travel insurance. These small features can save money and protect you from unexpected costs.
Tracy Afonso
Nedbank Executive Private Clients