How Gen Zers Are Reshaping Credit Card Marketing


Generation Z is widely touted as the most socially conscious, digitally native generation in history. This cohort is often defined as those born between 1997 and 2012. Some 63 percent of Gen Zers are more inclined to buy from a company that contributes to a social cause, Afterpay reports. And Gen Zers are three times more likely than older Americans to say the purpose of business is to serve communities and society rather than to make good products and services, according to BBMG and GlobeScan.

I’m an older millennial, not a Gen Zer. These themes unexpectedly hit home for me during a recent panel discussion at Payments Forum. One of the speakers was Cathryn Peirce, co-founder and CEO of Carbon Zero Financial. Her company focuses on educating credit card users about their carbon footprints and donating rewards to projects that offset these carbon footprints (for example, funding wind farms and planting trees).

Honestly, I wasn’t expecting to get a whole lot out of this particular session. I’m not anti-environment by any means — I dutifully put my recycling bins out every week and sometimes pick up stray trash around the neighborhood — but it’s not an issue that I’m especially passionate about. Yet this ended up being one of my favorite panels of the conference.

The case for affinity marketing

People like to do business with companies that support causes they believe in, as Carbon Zero is doing with the environment. Other examples might include Black-owned businesses, women-led enterprises, LGBTQ+ issues or even lighter topics such as sports or cryptocurrency.

Traditionally, I haven’t been all that interested in credit cards that lean into specific niches. For instance, rather than using the Carbon Zero Visa, why not get a solid cash back credit card and either pocket the rewards or, if you choose, donate them to a cause you care about?

For starters, a lot of cardholders aren’t getting much value from the cards they already have. Peirce cited our research that about three in 10 rewards credit card users didn’t redeem any rewards in 2020. She said many consumers, especially young adults, are asking, “Why would I want to accumulate a currency that I can’t use that’s going to be worth less in the future?”

Of course, traditional credit card rewards such as cash back and travel can be worth a lot, but her main idea is well taken. I have a lot of friends and family members who don’t really care about credit card rewards or know how to make the best use of them.

As Peirce pointed out, young adults love to use technology to measure everything from how many steps they took today to how well they slipped last night. Carbon Zero is using technology to measure and support a cause that many people care about (the environment). Cardless is doing the same thing with sports credit cards. It makes some people feel good to carry their favorite team’s logo around in their wallet. There are also tangible benefits to redeeming rewards for related experiences and merchandise.

Emotion matters

On paper, neither Carbon Zero nor Cardless is offering the absolute best way for everyone to earn or burn rewards points. Another case at point: There are certainly ways to donate more money to cancer research than carrying the Susan G. Komen Customized Cash Back Rewards credit card from Bank of America. But this card symbolizes something very meaningful to a lot of people. It’s not always about the profits or how many points or miles you earn. Sometimes using a particular credit card is a physical manifestation of belonging to a certain group or caring about a specific issue.

Rewards are not one-size-fits-all

We saw this previously with millennials. They were slow to adopt credit cards until the Chase Sapphire Reserve® was lauded for ushering in a new era that prioritized the experiences that millennials seem to crave (travel, in a broad sense, and even more specifically premium perks such as airport lounge access, skipping the security line and getting upgraded to first class).

It seems causes may be to Gen Z what experiences are to millennials. Peirce says Gen Zers trust technology and are conscious consumers. They’re a feisty and opinionated generation that wants personalized offers. They don’t necessarily want or trust certain aspects of the traditional American Dream they view as unattainable or stacked against them (an affordable college education, buying a home, etc.).

The bottom line

The biggest takeaway for me is that I have sometimes been too quick to dismiss niche credit card products, simply because they don’t appeal to me. For example, why would anyone get a credit card with crypto rewards when Bitcoin’s value is plummeting and some traditional cash back cards give higher payouts anyway? Maybe because they’re a true crypto believer, or they like the idea of ​​gambling with house money and it’s an easy way to get into the crypto market.

Beyond dollars and cents, sometimes it’s more important to feel like you’re connecting with a brand and its values. And that can be true whether we’re talking about wind farms, windfalls or even just your favorite basketball team.

Have a question about credit cards? E-mail me at ted.rossman@bankrate.com and I’d be happy to help.

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