Generation Z’s credit card debt is up 30% year-over-year … growing three times faster than other generations | Business Insider Japan

Credit card consolidation can be a strategic move to pay off credit card debt and pay less in interest over time.

Credit card consolidation is a great way to pay off your credit card debt and pay less interest in the long run.

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  • Generation Z is struggling to pay off credit cards amid rising inflation.
  • VantageScore data shows that young people’s credit card balances are up 30% from a year ago.
  • Consumers with low credit scores also saw their credit card balances increase by nearly 25%.

Inflation is starting to hit young people’s credit card bills.

According to VantageScore, a credit scoring company, Generation Z (the generation born between 1997 and 2012) will have more credit card balances in the second quarter (April-June) of 2022 than they did a year ago. It increased by 30%, compared to 11% for the rest of the population. The VantageScore data was randomly drawn from 12.5 million US credit files.

Those with credit scores below 660 also had nearly a 25% increase in their credit card balances, more than double that of the rest. Millennials also saw a 22% increase in their payment balances in the past year.

Younger and lower-income consumers are having a harder time paying their credit cards and other bills than they did early in the pandemic, as inflation has pushed up the price of petrol, food and other commodities.

“During the pandemic, stimulus payments, savings, and suspension of student loan repayments gave consumers some leeway to pay off their debts,” said Silvio Tavares, CEO and president of VantageScore. (Silvio Tavares) told Insider.

According to VantageScore, the percentage of people who are 30 days behind on their credit card loans is still low compared to pre-pandemic levels, but it is on the rise among Gen Z and millennials.

Credit bureau TransUnion expects credit card delinquencies to reach 8.4% in the first quarter of 2023, Reuters reported.

“This does not mean that something serious will happen,” Tavares said.

“But we need to monitor whether this trend continues and spreads to other generations.”

“Some Americans are spending money on travel and dining while not paying off their credit card debt,” he told Reuters.

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