:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2007595091-59d49e45dd394cf0a2611176d58b7713.jpg)
KEY TAKEAWAYS
- American consumers continue to accumulate debt, with younger generations adding debt faster than older generations.
- Younger consumers may have trouble keeping up with their debt and paying off credit cards that have high interest rates.
- Consumers also have to balance their other debts, like student loans, which are turning seriously delinquent faster than any other debt.
Younger American consumers are taking on more debt than older generations, and they may have trouble maintaining it in the future.
Total U.S. household debt, as tracked by the New York Federal Reserve, hit another all-time high during the second quarter of 2025.
Consolidated Credit, a nonprofit credit counseling agency, found that all enrollees in its credit management program held higher personal debt amounts in June than a year prior. In particular, Generation Z, born between 1997 to 2012, added more debt than any other generation.
| Generation Z Added More Debt Than Any Other Generation | |
|---|---|
| Generation | Year-over-Year Debt Amount Increase |
| Generation Z | 70% |
| Millennials | 52% |
| Generation X | 40% |
| Baby Boomers | 30% |
As American consumers continue to add to their record debt, more people, especially younger generations, are becoming overwhelmed by it, said April Lewis-Parks, director of education and communications at Consolidated Credit.
“[Younger Americans] started their financial lives in a volatile economy, and many are juggling rent, student loans, and credit cards at rates over 24%,” Lewis-Parks said in a press release. “We’re at a tipping point. More people are behind or juggling than those who are current. Without intervention, those balances will tip over into default.”
Total credit and debit card spending per household increased by 1.8% in July compared to the same period a year ago, according to Bank of America’s aggregated card data. That increase, which is the largest since January, is likely associated with back-to-school shopping and large multi-day sales like Amazon Prime Day. However, the bank says that thanks to strong wage growth in recent years, credit card balances are still not high relative to after-tax salary amounts.
Yet high interest rates may make it harder for consumers to keep up with their credit card debt. The Board of Governors of the Federal Reserve System reported that the average interest rate for a credit card in May was 21.16%, continuing a year-long trend of significantly higher interest rates.
Additionally, the rate of student loan borrowers who are becoming seriously delinquent is rising faster than any other debt type. Student loans are held mainly by Gen Z and Millennials, although the majority of seriously delinquent borrowers are 50 years or older, based on data aggregated by Bank of America.