Tailoring a Cobranded Credit Card for Gen Z

Credit card offers begin piling up for young people by the time they turn 18. And no wonder: The latest generation to come of age, Generation Z—individuals born between 1996 and 2011—represent 20% of the U.S. population, having overtaken millennials as the largest generation. Perhaps more importantly for brands, their spending power is gargantuan—$33 trillion expected over the next decade. 

Understand Gen Z and credit cards

As a group, Gen Z is more diverse than preceding generations in terms of race, ethnicity, and gender identity. They’re more educated, with higher high school graduation and college enrollment rates. And they’re known to seek authenticity, value inclusivity, champion social responsibility, and prize individuality. Thus, marketers who want to capture Gen Z’s loyalty must anchor their efforts in engagement strategies tailored to these characteristics and values. And credit card companies must follow suit.

Fortunately for such companies, credit cards continue to be popular among all generations. Most Americans (about 73%, in fact) have a credit card by age 25. And for the majority of cardholders, credit cards are their first credit-building experience. In fact, younger consumers tend to open a credit card for this exact purpose.

Impressively, according to research by TransUnion, Gen Zers’ use of credit cards—even though more than half aren’t old enough to get credit cards—is already outpacing millennials’ use. That said, among current generations paying off their balances, Gen Z leads at 56%. Meanwhile, Gen Zers aren’t of one mind when it comes to credit. Roughly 26% of those able to access credit don’t use it, preferring cash transactions, finding cash easier to track than credit, and feeling uneasy about potential credit card debt.

Foster Gen Z’s brand love

As more members of Gen Z move into adulthood and toward financial independence, their tech savvy and social values will rule their decisions. Brands looking to reach this group should consider teaming up with credit card companies to create cobranded cards. This powerful tool can cultivate Gen Z brand devotion.

Interested? Here are some top considerations for crafting a cobranded card Gen Zers will welcome:

• Focus on Gen Z specifically

Speak directly to their need to build credit, their motivation to pay off balances, their desire to earn rewards, and their preference for flexibility. Additionally, don’t suggest by your messaging that they have experience with other credit cards. Instead, fine-tune your messages to this generation’s needs and wants.

• Win them over with seamless technology

Offer apps and online platforms—Gen Z’s go-to methods for managing finances. They enthusiastically embrace financial technologies (fintech) like mobile banking, digital wallets, and robo advisors. They’re also looking for convenience, minimal cost, and a great user experience.

• Share useful resources

Create tools to help Gen Zers as they establish their financial footing. As the youngest generation, they’re still building their financial literacy. Providing free credit scores and credit score simulators can help them learn how their decisions can impact their budgets.

• Know their channels

Capture Gen Z’s attention by placing your brand messaging in their preferred channels. According to Statista, among individuals age 18 to 24, these are YouTube (96%), TikTok (72%), Instagram (69%), and Reddit (55%). However, don’t ignore old-school direct mail. According to research by the U.S. Postal Service, nearly 40% of Gen Zers appreciate receiving actual mail, especially if its content and design are personalized for them.

• Earn their trust early

Be authentic in your brand messaging to win their respect. Gen Z has little tolerance for a sell-sell-sell vibe. According to YPulse, a marketing research firm that focuses on young people, “Authentic is when a company transparently expresses its true identity and values through its business practices, messaging, products, and content.” Based on YPulse’s research among 75,000 young North Americans, Gen Z’s top five trusted brands are Nike, Coca-Cola, YouTube, Oreo, and Cash App, in that order.

• Customize their experience

While personalization of messages and offers is a baseline expectation across generations, it’s especially true among Gen Zers. Work to build a seamless customer experience in which your brand’s app and website both “know” the customer. Personalize offers based on each customer’s past purchase(s), behaviors, and demographic data.

Get inspired by brands getting it right with Gen Z

Don’t be afraid to borrow from another brand’s success—adapted to align with your brand’s product, values, and voice. You may want to take a cue from these brands earning Gen Z’s devotion and dollars:

• Female Invest, one of Brandwatch’s top 10 change makers of 2023, provides financial education for a monthly fee. Its high-quality, eye-catching marketing speaks Gen Z’s language and is tailored to social channels.

• Nerd Wallet is another brand engaged in financial education. It uses micro learning modules with quick, relevant, and focused content to build toward the goal of users making financial decisions with confidence.

• Popular clothing brand Under Armour appeals to Gen Z’s soft spot for influence marketing through its partnership with NBA superstar Steph Curry. It also speaks to the generation’s social conscience and embrace of individuality with the tagline “Ignore the hate. Keep doing you.”

• Venmo, a fintech app now embraced across generations, places a premium on personalization by printing individualized QR codes—for identification and connections—on its cobranded cards. Like many other cards in the market, it also invites cardholders to choose elements of their card design.

Start now and keep cultivating

Brands that successfully reach Gen Zers with cobranded credit cards will have another way to grow and maintain their brand devotion. It’s vital to break through the communications clutter with materials that bypass complex financial jargon with direct and concise information across channels. And it’s equally important to embrace Gen Z’s social conscience and cosign their celebration of individuality.

Finding ways to engage Gen Zers and build their trust and affinity with credit card products that resonate with their needs and values could pay dividends over decades.

Leanne Cordes is senior vice president, Strategic Services, at The Lacek Group. For more than 30 years, The Lacek Group has been perfecting the art and algorithms of brand devotion. We help world-class brands identify their highest-potential customers, engage them across channels throughout their lifecycles, personalize each relationship for optimal long-term results, and measure the true effectiveness of those efforts. The Lacek Group is an Ogilvy One company.