How and why millennials and Gen X approach financing differently
Financing and shopping preferences can vary widely between generations. Businesses that understand these differences are better positioned to serve all generations. Learn how millennials and Gen X approach shopping and paying for what they need.
Key Takeaways:
Life stages – marriage, parenthood, home ownership – shape how each generation shops and spends.
Traditional financing doesn’t always meet the needs of millennials and Gen Xers, especially those with lower credit scores.
Alternative financing can bridge the credit gap and help retailers capture more sales and build loyalty across generations.
Financing needs change as people move through life. Major events – getting married, buying a home, having children, becoming empty nesters – all impact financial decisions. For millennials and Gen X, the differences in how they approach financing can be significant.
Understanding these distinctions is key for businesses that want to better serve customers of every generation and credit profile.
A new study from Snap Finance, “Closing the Credit Gap: Major Purchase Study,” confirms that different generations have unique needs and, often, different credit challenges. Among consumers with credit scores below 670, Snap Finance found that 38% are millennials and 36% are Gen X.
Although their life stages differ, a large percentage of both of these generations need access to financing options designed with credit-challenged customers in mind. For comparison, only 16% of boomers and 6% of Gen Z have credit scores below 670, according to the Snap Finance survey.
These findings highlight a crucial opportunity for merchants who engage with and serve millennial and Gen X consumers with low or subprime credit.
How millennials and Gen X are different – and how they’re alike
To understand their financial behaviors, we first need to understand the generations themselves. Generation X, born between 1965 and 1980, grew up in different world than millennials, born between 1981 and 1996. Gen Xers came of age during a time of economic uncertainty, witnessing recessions and corporate downsizing. They are often characterized as independent, resourceful, and skeptical. Their financial mindset was shaped by a world that was just beginning to embrace digital technology.
Millennials, on the other hand, are digital natives. They grew up with the internet and came of age during the 2008 financial crisis and the subsequent Great Recession. This experience profoundly shaped their views on debt, employment, and major life milestones. They are often seen as more collaborative and tech-savvy than previous generations, but also more cautious about traditional financial institutions and behaviors.
Despite these differences, both generations share some common ground. They are both navigating significant life stages, from parenthood to homeownership. They value convenience and seek out brands that understand their needs. And, as the Snap study shows, a substantial portion of both generations are dealing with the challenges of having a subprime credit score.
Understanding generational shopping differences and approaches to financing is the first step toward building stronger relationships with these valuable customers.
Life stages lead to changes in needs and attitudes
Beyond generational traits, a person’s current life stage is a powerful driver of their financing needs. The Snap Finance study found millennials and Gen X are often at different life stages and circumstances.
Among millennials with credit scores below 670:
45% are married
56% have children living in the home
36% are homeowners
59% are employed full-time
73% earn less than $75K
Among Gen X with credit scores below 670:
44% are married
33% have children living in the home
43% are homeowners
51% are employed full-time
72% earn less than $75K
A large portion of the subprime market is made up of well-established households. They aren't just young people starting out; they are families and homeowners who need to make essential purchases. They might be looking to finance a new set of tires, a bigger mattress, or furniture for a new space. When traditional credit isn't an option, these consumers need a reliable alternative.
How generational differences shape attitudes toward financing
When it comes to using financing, both generations are open to it, but for different reasons and through different channels. In general, Gen X financing behavior may lean more traditional, as they grew up with established options like credit cards and bank loans. However, their skepticism can make them wary of hidden fees and complex terms. They value transparency and are more likely to do extensive research before committing. For example, 27% of Gen Xers with lower credit scores apply for financing with multiple companies to compare offers.
Millennial shopping habits also reflect their experiences. Having witnessed the 2008 financial crisis, many millennials are hesitant to take on credit card debt, compared to older generations – 19% of millennials don’t own a credit card. They may not qualify for a credit card or simply prefer options with clear payment schedules and fixed terms instead of revolving credit. For them, control and predictability are often paramount.
Both generations show a disconnect with traditional financing. In a recent Snap Finance survey of those with lower credit scores, 34% of millennials and 38% of Gen Xers said traditional banks and credit card companies don’t understand their needs.
That may explain their use of alternative financing options. According to the same Snap Finance survey, in the past five years, among those with lower credit scores:
27% of millennials and 25% of Gen Xers have used lease-to-own financing
51% of millennials and 42% of GenXers have used installment loan financing
Qualifying for financing is another concern. A significant portion of both generations have credit scores below 670. They may be struggling with bankruptcies, missed payments, thin credit files, student debt, or other factors that impact credit scores. Pay-over-time solutions that look beyond credit scores, including Snap-branded lease-to-own financing and loan options, can help more customers get what they need now from your business and pay later.
How retailers can use this information
Retailers who understand generational shopping differences are better equipped to serve customers of all ages, especially the significant number of millennials and Gen X customers who have low or subprime credit scores.
1. Offer access to more financing options
Millennials are digital-first shoppers. They expect instant decisions, easy applications, and mobile access – all available with Snap Finance. Gen X consumers also appreciate speed but are more focused on reliability and trust. Offering access to online and in-store application options with clear communication about terms can appeal to both.
2. Provide education and transparency
Subprime customers often feel uncertain about financing. Take the time to explain how alternative financing works to build confidence and trust. Use plain language, show payment examples, and avoid jargon.
3. Partner with inclusive financing providers
When consumers don’t qualify for traditional credit, they often assume they can’t make the purchase. Snap Finance helps bridge that gap with convenient lease-to-own financing and loan options especially designed for customers with less-than-perfect credit.1 When others say no, Snap Finance helps more customers get what they need and helps you close more sales. If you’re not currently a Snap Partner, learn how Snap helps turn declines into sales.
4. Align marketing with generational values
For Gen X, focus on the practical benefits and long-term value. For millennials, highlight the flexibility and control that alternative financing offers. For example, highlight mobile convenience and simple payment management for millennials, and emphasize customer support and reliability for Gen X.
By recognizing these distinctions, you can attract more buyers, increase conversion rates, and build lasting relationships across generations.
Implications for future credit accessibility
The growing acceptance of alternative financing has significant implications for both consumers and merchants.
What alternative financing means for consumers
Alternative financing means more shoppers can get what they need and is a lifeline when customers with less-than-perfect credit are denied traditional financing.
Millennials’ openness to innovation – from digital wallets to payment platforms – is reshaping expectations for what money management and financing should look like. Their comfort with technology will likely continue to push lenders and retailers to simplify processes, increase transparency, and personalize offers.
Gen Xers, meanwhile, continue to be a bridge between traditional financing and inclusive alternatives. Although in general they value established institutions, they seem option to exploring new processes and tools when they feel secure.
Understanding these generational shopping differences and financing preferences can help both groups navigate their financial choices.
What alternative financing means for retailers
For merchants, embracing alternative financing is no longer just an option – it's a competitive necessity. By offering access to solutions like Snap-branded lease-to-own financing or loan options, you can tap into an underserved market of millennial and Gen X consumers. Retailers who rely solely on prime lenders risk excluding a large portion of potential buyers.
Among Snap Finance retail partners, 75% say partnering with Snap Finance has increased sales.2 When you promote Snap Finance as an option to your customers, you can:
Expand your customer base beyond those who qualify for traditional financing
Improve sales conversion rates among shoppers who might otherwise abandon a purchase
Strengthen long-term relationships through positive financing experiences
A roadmap for future generations
Understanding millennial shopping habits and Gen X financing preferences can help businesses tailor promotions and communication strategies to better connect with each generation. As Gen Z major purchases start to rise in the coming years, understanding how millennials and Gen X evolved in their financing behaviors can provide a roadmap for serving the next generation.
By promoting transparent financing options like Snap Finance, businesses can meet consumers of all ages where they are, helping them get what they need now and pay later. When financing works for everyone, everyone wins.
Read our full study, “Closing the Credit Gap: Major Purchase Study” to learn more about how businesses like yours can help bridge the credit gap for more customers.
Interested in learning more? Check out these resources from Snap Finance:
Not a Snap Partner? Learn more about partnering with Snap Finance.
Snap-branded product offering includes retail installment contracts, bank installment loans, and lease-to-own financing. For more detailed information, please visit snapfinance.com/legal/products.
1 Not all applicants are approved. Approvals subject to underwriting qualification criteria.
2 Proprietary research from survey of Snap Finance merchants, 2023.