Gen Z is making financial history — but not in a good way.
According to a new TransUnion study, the average credit card balance for 22- to 24-year-olds reached $2,834 at the end of 2023, a 26% increase from what millennials owed at the same age a decade ago. While their overall debt levels remain lower than older generations, the current trajectory shows Gen Zers are building credit-card debt faster than anyone else.
“Gen Z really prioritizes fun over finances when it comes to things like eating out, shopping and travel,” says Courtney Alev, a consumer advocate at Credit Karma. “That combined with the fact that they have just had fewer earning years explains why their credit card debt is growing at a faster rate.”
Looking for financial comfort with credit has spurred more Gen Zers to open accounts, even while they struggle to keep up with payments. From March 2022 to February 2024, the percentage of Credit Karma’s Gen Z users with low credit scores (below 600) rose to 33%, up from 25%. Meanwhile, the Federal Reserve Bank of New York found that younger credit card holders are more likely to fall behind on payments compared to older generations.
Technology also plays a role. As digital natives, Gen Zers have embraced electronic payment methods like digital wallets and buy-now-pay-later services, which has in turn normalized debt acquisition. Credit card companies have taken advantage of this trend, making it easier for Gen Zers to get approved, even if their credit scores are less than stellar.
Experts are warning young spenders that putting everything on credit now could have a massive consequence on their future financial plans.
“The financial burdens that Gen Z is facing today can really have long-lasting effects on their lives,” Alev says, “including their ability to achieve key milestones, such as delaying big moments like marriage, buying a home, or starting families until they feel more financially secure.”
