In the age of contactless payments, cash may be making a comeback thanks to Gen Z: 69% of Gen Zers are using cash more now than they did 12 months ago, according to Credit Karma. Additionally, nearly a quarter of Gen Z (23%) use cash for the majority of their purchases.

So, if cash is king for Gen Z, does that mean that it’s a generation that is ditching credit cards? Sort of, if cash stuffing is any indication. It’s a budgeting method where you allocate different spending categories to different envelopes and stuff them with cash. That way, you avoid overspending or racking up credit card debt.

Courtney Alev, consumer financial advocate at Credit Karma, says it’s not surprising that Gen Zers are bringing cash back – Gen Z has developed a reputation as a nostalgic generation who takes fashion cues from the 90s and Y2K. That says, Alev notes the importance of building credit for accessing better priced financial products down the line: “Whether using the cash stuffing method or simply pulling out a set dollar amount each paycheck to ensure you’re not overspending, make sure you’re still doing the work to build your credit. That can be as simple as setting up monthly subscriptions on one credit card and paying it off at the end of each month or using one card to pay for gas expenses.”

Credit card income requirements

Whether you’re a Gen Zer on a personal finance journey or the parent of one, you may be wondering about credit card income requirements. The minimum income requirement for a credit card varies depending on the issuer and the type of card. Different credit cards have different eligibility criteria set by the issuing bank or financial institution.

Generally, credit card applications may specify a minimum income threshold to ensure the applicant has the financial means to make timely payments. This minimum income requirement helps assess the individual’s ability to handle credit responsibly. While specific income requirements can differ, some credit cards may have minimum income thresholds ranging from a few thousand dollars to higher amounts. It’s important to research and compare different credit cards to find one that aligns with your income and financial situation.

Can you overdraft a credit card?

Responsible credit card use is always a good practice. A commonly asked question is whether you can overdraft a credit card in the same way that you can overdraft a checking account. Not exactly – though going over your limit would be the equivalent. And the impact of overdrafting your credit card in that way can be negative.

When you go over your credit limit on a credit card, several consequences can occur. Firstly, the credit card issuer may charge an over-limit fee, which is an additional charge for exceeding your credit limit. This fee can vary depending on the issuer and the terms of your credit card agreement.

Moreover, going over your limit can have a negative impact on your credit score. Credit utilization, which is the ratio of your credit card balance to your credit limit, is a significant factor in determining your creditworthiness. Exceeding your credit limit increases your credit utilization, which can lower your credit score.

Additionally, going over your credit limit may lead to penalties such as increased interest rates or a reduction in your limit. The credit card issuer may also consider it a breach of the terms and conditions, which could result in adverse actions such as closing your account or suspending your charging privileges.

To avoid these consequences, it’s important to closely monitor your credit card balance and spending, stay within your credit limit, and consider contacting your card issuer if you anticipate needing a higher credit limit or if you’re experiencing financial difficulties.