Americans in their 20s are starting their adult lives with more credit card debt than previous generations, largely due to rising food and housing costs and student loan debt, economists and financial advisors told The Wall Street Journal in a May 7 report.
"This is a generation that is feeling financial stress in a more acute way than millennials did a decade ago," Charlie Wise, head of global research at the credit reporting agency TransUnion, told the news outlet.
As of January, median rent in the U.S. was nearly $2,000, marking a 22% increase across the past four years, according to data from Rent, an online marketplace, cited by the WSJ. Meanwhile, data from TransUnion shows the average credit card balance for 22- to 24-year-olds has risen over the past decade from $2,248 (inflation-adjusted) in the last quarter of 2013, to $2,834 in the same period of 2023.
Financial experts told the news outlet that younger individuals with higher debt levels are more delinquent on card payments and tend to rely on family for support when facing job loss. Financial strain often leads to Gen Zers postponing homeownership, marriage and other life milestones.
While young people have always had lower wealth compared to other generations, "the last several years have been particularly complicated because rental inflation has been so high," Scott Fulford, PhD, senior economist at the Consumer Financial Protection Bureau, told the Journal.