Do millennials have credit card debt?
While Americans of all ages are grappling with higher balances, Gen Z and millennials are seeing the largest average increases in total debt and the steepest decline in credit scores, according to data provided to Fortune by personal finance company Credit Karma on tens of millions of member accounts.
Americans collectively owe over $1 trillion in credit card debt. But one generation carries the most, on average: Gen X. The average credit card balance for Gen Xers, defined at those between the ages of 43 and 58, rose to $9,123 in the third quarter of 2023, according to Experian's latest available data.
Credit Card Debt Demographics
Baby boomers and Generation X had the highest credit card balances of over $7,500 in 2022. Millennials take second place with around $6,500 in credit card debt. Cardholders 75 and over had the lowest debt, at just under $4,000.
| Age Group | Median Credit Card Debt | Percentage Who Carry Debt |
|---|---|---|
| Younger than 35 | $1,900 | 48% |
| 35-44 | $2,600 | 51% |
| 45-54 | $3,200 | 52% |
| 55-64 | $3,000 | 47% |
$5,000 in credit card debt can be quite costly in the long run. That's especially the case if you only make minimum payments each month. However, you don't have to accept decades of credit card debt.
Credit card debt by generation
Gen Z currently has the lowest average amount of credit card debt at an estimated $2,854. Credit card debt for millennials and Gen Z is increasing, but this type of debt is decreasing for Generation X, baby boomers, and the Silent Generation.
King said millennials' purchasing preferences and the soaring cost of living has led many into "a vicious cycle of taking on more debt." Many were "forced" to rely on credit cards and loans to meet their needs, adding to their "crippling debt pile."
A breakdown of younger generation credit scores
Millennials and Gen Zers, however, average lower credit scores. Millennials average a credit score of 690, and Gen Zers come in at 680. For reference, the qualifying credit score for most conventional home loans is 620, according to Rocket Mortgage.
Close to half of respondents report feeling hopeless about their financial situation. Many factors are at play, including income, debt, dwindling savings, and poor financial choices. Close to 75% of millennial women and 70% of all those surveyed say they struggle to make ends meet with their current salary.
How many people have $50,000 in credit card debt?
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year.
| Generation | Average Credit Card Debt |
|---|---|
| Millennials | $6,521 |
| Generation X | $9,123 |
| Baby boomers | $6,642 |
| Silent generation | $3,412 |
The general rule of thumb is that you shouldn't spend more than 10 percent of your take-home income on credit card debt.
A good goal is to be debt-free by retirement age, either 65 or earlier if you want. If you have other goals, such as taking a sabbatical or starting a business, you should make sure that your debt isn't going to hold you back.
What percentage of America is debt-free? According to that same Experian study, less than 25% of American households are debt-free. This figure may be small for a variety of reasons, particularly because of the high number of home mortgages and auto loans many Americans have.
What is the average credit score? The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
However, multiple accounts may be difficult to track, resulting in missed payments that lower your credit score. You must decide what you can manage and what will make you appear most desirable. Having too many cards with a zero balance will not improve your credit score. In fact, it can actually hurt it.
- Review and revise your budget. ...
- Make more than the minimum payment each month. ...
- Target one debt at a time. ...
- Consolidate credit card debt. ...
- Contact your credit card provider.
The World Happiness Report is out and Finland has once again been declared the happiest country in the world. However, the report reveals that Gen Z (aged 15-24) are unhappy.
Which generation has it the hardest financially?
Gen Zers are having a harder time making ends meet, let alone building wealth. Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a recent Bankrate report.
Gen Z faces unique financial challenges compared to older generations. College graduates earn 10% less compared to their parents, recent research found. High inflation — and affordability concerns among Gen Zers — extend beyond U.S. borders.
The average Millennial salary is about $47,034, according to the U.S. Census Bureau. The average Millennial household makes $69,000 a year, according to the Pew Research Center.
Key Takeaways. Millennials are confronting the distinct financial challenges they have, such as a post-recession job market, high student loan debt balances, a more expensive housing market, and growing credit card debt.
Within Gen Z, financial literacy tends to be lowest among those who have never attended college. On average, this group correctly answered only 39% of the index questions. Across generations, financial literacy tends to be greatest in the areas of borrowing and saving.
