Gen Z’s Debt Problem May Be the Number of Payments

Gen Z isn’t necessarily most stressed by how much debt it owes. It’s the sheer number of payments coming due that can feel overwhelming.

A new survey from Spinwheel Consumer Research found that Gen Z is the only generation that feels more financial pressure from the number of payments it manages than from the total amount it owes.

Nearly three-quarters of Gen Z respondents said thinking about debt is overwhelming, while half said they avoid looking at their finances when possible.

The findings suggest that, for surveyed Gen Z consumers, keeping track of multiple bills and due dates may feel more stressful than any single outstanding balance.

Credit cards, Buy Now, Pay Later plans, subscriptions, student loans, and auto loans can each add another payment to manage. Even when the individual balances are relatively small, the growing list of due dates can be difficult to track.

Juggling BNPL Balances

Gen Zers aren’t the only consumers managing multiple bills. Buy Now, Pay Later shoppers of all ages risk taking on several payments as they shop.

In 2022, 63% of BNPL borrowers held multiple simultaneous BNPL loans, including 33% who did so across multiple providers, according to the Consumer Financial Protection Bureau.

The estimated volume of U.S. pay-in-four credit issuance increased from $43.9 billion in 2023 to $78.3 billion in 2025, according to Federal Reserve researchers. Each purchase can add several payment dates to a consumer’s financial calendar.

That can leave consumers tracking several payment dates after only a few BNPL purchases.

BNPL users appear more likely than nonusers to face financial constraints. BNPL users were significantly more likely to display signs of financial constraint than people who didn’t shop BNPL, according to a study by the Federal Reserve Bank of Kansas City. 

Nearly half of BNPL users in the Kansas City Fed study had four or more indicators of financial constraint, and late payments were highly correlated with a greater number of those indicators.

Cash Stuffing Makes a Comeback

Putting aside cash into separate envelopes to pay bills may be something your grandmother used to do. But it helped her reserve money for each bill and spending category. Rent money got stuffed in one envelope and money for groceries in another and so on until each important item in her budget had an envelope. 

She decided how much money to stuff in each envelope for each category. The system can help people reserve money for specific expenses and see when a spending category has reached its limit.

The old-fashioned budgeting method has found a new audience through cash-stuffing videos on TikTok.

Popular financial expert Dave Ramsey also recommends cash stuffing or envelope budgeting. The goal is to only spend the amount of money that you place in each envelope each month. If an envelope empties of cash that means you’re done spending in that category for that month.

How Consolidation Loans Work

Gen Z feeling overwhelmed by their multitude of bills and payments may want to try out the cash stuffing method. But if too many envelopes are too much to handle, they may want to consider a debt consolidation loan.

It is already something they have on their mind. Fifty-two percent of Gen Zers want to consolidate debt but aren’t sure how to do it, according to Spinwheel Consumer Research.

Debt consolidation allows borrowers to use a new credit product to pay off multiple eligible debts, potentially replacing several payments with one. So you could have one debt payment to make each month instead of several.

The new loan may carry a lower rate, but borrowers should always compare its APR, fees, repayment term, and total cost with those of their existing debts to ensure they are getting a good deal.

One way to achieve debt consolidation is by applying for an unsecured personal loan. Available loan amounts and qualification requirements vary by lender. Borrowers with stronger credit generally have a better chance of qualifying for larger loans and lower interest rates.

Borrowers should check for origination fees, prepayment penalties, and other lender-specific costs before accepting a loan.

Once you are approved, the lender may send the proceeds to you or pay participating creditors directly. After the debts included in the consolidation are paid off, you could have one new loan payment instead of several.

Other Consolidation Options

If your debts are mainly federal student loans, you may wish to consolidate them into a single Direct Consolidation Loan. A Direct Consolidation Loan can combine eligible federal loans into one payment and may lower the monthly amount by extending repayment, but a longer term can increase the total interest paid.

And if your debts are mainly credit cards, you may wish to transfer balances to a new card with a lower interest rate or attractive introductory offer. But that lower interest rate isn’t always free. Watch out for balance transfer fees that range from 3% to 5% and make note of when a low-rate balance transfer offer ends. 

Still, a balance transfer is a way to consolidate credit card debt and land a lower interest rate for several months if you qualify.

If you are unable to qualify for a personal loan or a balance transfer on a credit card, here are some other strategies to consider.

These strategies include revamping your budget and finding more money to pay off debt, negotiating directly with creditors, and signing on for a low-cost debt management plan with a nonprofit credit counselor.