Younger Americans Rely More on Cards as Balances Rise

When it comes to spending, Americans, especially consumers under 60, are turning to their credit cards. 

How are Americans doing overall? Credit card borrowing is up almost 5%, according to the latest figures from the Federal Reserve. 

According to October data, the latest available, revolving credit has increased at an annual rate of 4.9%, and non-revolving credit has increased by 1.2%.

Which consumers are carrying greater card balances? Gen Z, millennials, and Gen X card customers are all charging away on their credit cards and increasing their credit card balances.

Gen Z Powers Up Credit Card Spending

Among the American consumers leaning heavily on credit cards is Gen Z, whose ages range from 13 to 28. Gen Z may have jobs, but they are racking up 36% to 37% higher credit card balances than other age groups, according to Intuit Chief Executive Officer Sasan Goodarzi. 

And many Gen Zers are letting those credit card balances linger month after month. According to Billtrust, only 47% of Gen Zers pay off their credit card balances in full every month. This means that a majority of Gen Z, 53%, revolve balances and pay finance charges on their credit card accounts. 

Some Gen Zers are pushing their credit card spending close to their card limits. One report from the Federal Reserve Bank of Texas shows Gen Z Texans using 75% — or more — of their credit limits. 

How long can Gen Z  manage these balances without falling behind on payments? Only time and their spending habits will tell. 

Millennials Seek Credit Help

Millennials, aged 29 to 44, aren’t shy when it comes to using their credit cards. They carry an average credit card balance of $6,961, according to Experian. Some can’t keep up with their card balances and need help.

Millennials make up 43% of new clients at Money Management International, a nonprofit  debt counselor. The average millennial client has $30,000 in unsecured debt, which includes credit card debt. 

Gen Xers and Their Growing Card Balances

Often called the “sandwich generation” because of dual duties of caring for children and their aging parents, Gen Xers carry an average credit card balance of $9,600, according to Experian. This hefty balance is a $2,600 increase from three years ago. 

Shrinking household income and increasing credit card balances are causing financial stress for this generation of borrowers aged 45 to 60.

Higher APRs Hit All Borrowers

Borrowers are likely to feel the impact of high interest rates on their credit card accounts at any age. According to Experian, annual percentage rates in 2025 were an average of about 22%, and this rate gets applied whenever a credit card customer carries a balance. 

Those higher rates are affecting many consumers. According to Bankrate.com, 46% of U.S. credit card customers carry a balance. 

Borrowers Use Credit Cards for Necessities

Credit card customers of all ages are using their credit cards to pay for necessities, including groceries, Experian reports. All these necessities can add up to a hefty, revolving card balance if they are unable to pay their balance in full. 

How many consumers are turning to credit cards for necessities? According to Bankrate.com, 28% of consumers are paying for day-to-day expenses such as groceries, utilities, and childcare on their credit cards. 

The Bottom Line

Credit card spending is increasing with borrowers from Gen Z, millennials, and Gen X leading the charge. Credit card borrowers of all ages are using credit cards to pay for necessary items such as groceries. Borrowers carrying balances are facing higher APRs.