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Study reveals Gen Z and millennials are paying highest bank fees

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London, UK
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Gen Z and millennials are now paying the highest banking fees. Are young people in general too spend-happy, or is there more to it than that?

It’s all overdrafts, booze, and Uber Eats with youngsters today, right?

In reality, anyone who actually does their research will know that the financial plights of most Gen Zers and millennials are due to rising costs of living. Climbing the corporate ladder isn’t as simple as it once was, and not even our constant haggling on Depop can fix that.

What you may not have known, however, is that banks are instantly putting young people at a disadvantage. At least, that’s the noise breaking from a government backed survey this week.

According to BankRate (in cahoots with YouGov), 18-25 year olds in the US now pay on average $19 a month in bank fees, compared to $16 for millennials, and just $2 a month for baby boomers. The poll also found that younger customers are much more likely to have the types of accounts that require a monthly tariff.

Elsewhere, data shows that big US banks are making a killing from overdraft fees. Experts refer to the charge as something of a cash cow over the last decade, rounding up $9bn annually from who fintech expert Taylor Roberson describes as β€˜the most financially vulnerable.’

What this boils down to is young people having to facilitate studies, living expenses, accommodation, and a social life all in a very unforgiving financial landscape. Let’s not even talk about meagre wages or the issue of unpaid internships.

Before most young people have even had time to earn a stable footing, they’re beset by the largest bank charges and – should they begrudgingly dip into their overdraft – the most crushing fees ($33.50 a pop).

As we know, Gen Zers habitually opt for convenience as the biggest incentive when it comes to most things in life, especially finances. Challenger banks like Monzo are the popular choice for many, as their budgeting and real-time management tools just aren’t matched by conventional banks.

The big drawback of using purely challenger apps, however, is that we rarely see changing conditions within our primary banks. Those of us guilty of not checking these (which, let’s be honest, is most of us) means switching banks to avoid charges is rarely even a consideration.

As BankRate senior analyst Mark Hamrick states: β€˜They are in the early stages of their careers. There is a lot going on when one is a younger person, and one is trying to sort things out.’

On that front, US bank Capital One has opted to address a lack of β€˜humanity in banking’ by ditching overdraft and insufficient fund fees altogether. Elsewhere, some federal lawmakers, including Senator Elizabeth Warren of Massachusetts, are pushing to cap the revenue profits banks can generate from fees.

As it stands right now though, this level of compassion is rarely seen in the world of finances.

So, the next time you’re the recipient of a rant about your spend-happy generation, at least now you’re clued up enough to tell your elders how things really are.

Senior Writer London, UK

I’m Jamie (He/Him), the Editor in Chief at Thred. Keeping up with gaming and revolutionary technology is my forte, but when away from my keyboard, you’ll probably find me wrapped around a large Tango ice blast at the latest mediocre horror flick. Follow me on Twitter, LinkedIn and drop me some ideas/feedback viaΒ email.

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