CHICAGO, June 28, 2017 (GLOBE NEWSWIRE) -- Global risk information provider TransUnion® (NYSE:TRU) published a first-of-its kind report on Generation Z’s understanding of money and credit management today, which includes findings from a financial survey of more than 1,000 teenagers between the ages of 13 and 17.
The report explores the financial knowledge, experience and habits of American teenagers who will soon enter the adult population and independently contribute to America’s consumer economy. Topics covered include where teens learn about money, saving and spending habits, and experience with different payment types.
TransUnion also asked participating teens to grade their money management skills from A to F. Overall, most teens believe they are performing well, with 61 percent giving themselves an A or B.
“As a company, we’re committed to ensuring teens come into adulthood financially literate and credit-responsible,” said Heather Battison, Vice President of TransUnion. “To do so, we needed to take a step back and understand how these teens approach money and financial responsibility. We were pleasantly surprised by Generation Z’s foundational understanding of how to manage their money, but also recognize a clear need for more credit education.”
The detailed findings of the new study are available at transunion.com/genz2017 and suggest that on the whole, Generation Z is committed to sound money management, but still lack crucial experience in credit and borrowing.
Generation Z considers budget before purchase.
A vast majority of teens – 73 percent – consider the cost of an item before making a purchase, but only 58 percent consider whether or not they have enough money saved before making a purchase. Nearly all (83 percent) respondents say they are saving money, but only about 52 percent are saving for something in particular.
Teens are proactive in honing financial expertise.
Teens are most likely to learn about finances from their parents, at school, or through real-world experiences, according to the study. Interestingly, 77 percent of teens who learn about money from a parent or guardian are actively seeking out advice on the topic.
Teens are getting experience with credit at a young age.
About one in five (19 percent) of today’s teens are authorized to use a parent or guardian’s credit card. More than half (54 percent) of those with authorized access to a credit card say they received authorization at or before the age of 14. Surprisingly, 10 percent were added before they were teenagers (less than 13 years old).
Generation Z prefers debit to credit.
Compared to the number of teenagers with access to a credit card (as an authorized user), more than twice as many have a debit card. Forty percent of teens say they have a debit card, versus 19 percent who have authorized access to a parent or guardian’s card.
“Nothing beats real-world experience managing money and credit” said Battison. “The more practice teens can get saving money, spending responsibly, using credit and paying bills now, the more comfortable they will be managing their finances as adults. What this study shows is that today’s teens are hungry for that experience.”
To educate the next generation of credit users on the importance of credit health, Heather Battison offers five topics for parents to address with their teens:
- Spend less than you earn. It may seem like it goes without saying, but it’s worth talking about. Having a line of credit that is larger than your monthly income can be a temptation for anyone, especially a teen. Let them know that even if the card allows it, spending more than your monthly income or allowance can lead to missed payments, which can have a negative impact on credit.
- Learn responsible credit card use. Using a credit card — like a secured card that requires a security deposit as collateral to start a line of credit — for small purchases can help your teen establish credit history and see how on-time payments can positively impact credit.
- Practice patience. Building credit doesn’t happen overnight, which is why it is so important for your teen to start early. Many habits can help build credit, and showing your teens how your payment history has impacted credit over the years can help them understand the big picture.
- Debit doesn’t translate to credit. While debit cards are a great tool to help your teen spend within their financial means, they don’t demonstrate to lenders that they can handle credit. Therefore, debit card transactions don’t count towards a credit score.
- After you’re old enough to get a credit card, remember to check your credit report. Regularly checking your credit report will help your teen better understand his or her credit history and increase credit health knowledge. As teens practice good credit habits, they’ll see their credit grow and change over time.
About the Survey
These are the findings from an Ipsos poll conducted May 8-11, 2017 on behalf of TransUnion. For the survey, a sample of 1,001 teenagers between the ages of 13-17 from the continental U.S., Alaska and Hawaii was interviewed online, in English. All teenager respondents were granted permission by their parent/guardian in order to participate in the survey.
About TransUnion (NYSE:TRU)
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
We call this Information for Good. transunion.com
About Ipsos Public Affairs
Ipsos Public Affairs is a non-partisan, objective, survey-based research practice made up of seasoned professionals. We conduct strategic research initiatives for a diverse number of American and international organizations, based not only on public opinion research, but elite stakeholder, corporate, and media opinion research.
Ipsos has media partnerships with the most prestigious news organizations around the world. In Canada, the U.S., UK, and internationally, Ipsos Public Affairs is the media polling supplier to Reuters News, the world's leading source of intelligent information for businesses and professionals. Ipsos Public Affairs is a member of the Ipsos Group, a leading global survey-based market research company. We provide boutique-style customer service and work closely with our clients, while also undertaking global research.