Which Generation Has the Highest Credit Card Balances?

by Dana George | Updated July 28, 2021 - First published on June 28, 2021

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Multiple generations of people sharing a meal outdoors.

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Credit card debt is a weight on all generations, but this group has it especially hard.

While it's possible to avoid credit card use, it's not always convenient. If you're on vacation and your car breaks down on the side of the road, you may just need a credit card to cover repairs. And if you want to reserve a hotel room, a credit card can help you do that. The trouble with credit cards is their revolving nature -- you don't have to pay a card off in full each month, and when you don't, the balance rolls over into the next month with interest attached. And yet, credit cards are so readily available and convenient that it can be easy to get overextended.

All generations, with the exception of the Alpha Generation (kids aged 0-10) carry credit card debt, but it's Generation X that carries the most.

Here's how Generation X compares to the other five generations:

Rank Group Ages Average Credit Card Debt
#1 Generation X 41-56 $7,750
#2 Baby boomers 57-75 $7,550
#3 Silent Generation 76-93 $4,613
#4 Millennials 24-40 $4,315
#5 Generation Z 11-23 $2,047
#6 The Greatest Generation 94-120 $1,250
Data source: Averages derived from badcredit.org.

Adults from 41 to 75 take the top two spots on this list. There are a few likely reasons.

Sandwich generation

Both Gen Xers and baby boomers have often found themselves caring for aging parents and growing children at the same time. As these generations worked to provide financially for those older and those younger than them, wages stagnated. According to the Economic Policy Institute (EPI), between 1979 and 2019, wages stopped keeping up with inflation. Of those 40 years, there was consistent positive wage growth in only 10 of them. When costs go up at a faster clip than income, credit cards can become a way to purchase everyday necessities.

Less job opportunity

Millions of baby boomers who once made good incomes without a college degree found themselves out of jobs. That's because 5.7 million Americans lost their manufacturing jobs during the first 10 years of the 2000s. That's worse than the rate of manufacturing job losses during the Great Depression. That means that 1 out of 3 workers in manufacturing had to reinvent themselves and their careers as the sector shrank. Frequently, what these well-compensated workers found were jobs that paid less and offered fewer benefits (including healthcare and time off).

Many Gen Xers began their careers during this time, and soon faced the fallout of the Great Recession, when jobs were at a premium. The kinds of jobs their parents had once effortlessly walked into were no longer open to them, and their career options appeared limited. A credit card may have seemed like the only answer for some who found themselves in such circumstances.

Overly optimistic thinking

Just as being overly pessimistic can be bad for you, being overly optimistic about your financial future can lead to costly mistakes. Many Americans (and virtually all baby boomers) were raised to believe that the sky was the limit, that anyone could become a CEO or President of the United States. The message was, "If you believe in yourself enough and work hard, the world is your oyster."

Americans are known to be optimistic, which can be a wonderful thing -- as long as it's tempered by reality. Studies show that American adults are naturally more optimistic than adults in well-off European countries. For some of us, going into debt poses no risk because either:

  • Our financial situation is about to improve.
  • The asset we went into debt for will appreciate in value.

The truth is, going into any kind of debt -- including credit card debt -- is risky if you don't have a surefire way to pay it off before interest starts sticking to it.

Debt elimination strategies

No matter what generation you're part of, getting out of debt is possible. It may not be fast or easy, but it's a goal worth pursuing. Allow the inspiration to be the extra money that will flow into your bank account once the debt is paid off.

0% promotional rate credit card

Credit card companies frequently offer new customers a 0% intro APR promotional rate for 12 to 18 months. Let's say you owe $3,600 in credit card debt, and because you have a strong credit score, you qualify for a 0% intro APR credit card with a promotional rate that lasts 18 months. Once you transfer the old debt to your new card, you can pay it off in full by making $200 per month payments -- without paying any interest.

Add extra to each payment

Let's say you're paying 17% interest on a $3,600 balance. Your monthly payment is $108 per month. At this rate, it will take you 46 months to pay the credit card off in full, and you'll pay $1,306 in interest.

Now, if you add an extra $50 toward the monthly payment (for a total of $158), the credit card will be paid off in 28 months, and you'll pay $777 in interest.

If you can put another $50 toward the bill each month (for a total of $208), you'll have the card paid off in 20 months, and you'll pay $559 in interest. In other words, throwing another $100 at the credit card each month knocks 26 months off the time it takes to repay the debt, and saves $747 in interest. That's $747 you can use to fund a Roth IRA or other investment vehicle.

Apply found money

Each time you "find" money through a raise, bonus, inheritance, or the sale of an item of value -- and you don't need the funds for everyday living expenses -- put the money toward the credit card debt.

More debt to erase?

Of course, Americans have more than one kind of debt. You may have a mortgage, car payment, personal loan, or other kind of debt you'd love to get rid of. Debt-busting strategies like these help you choose the payoff method that works best for you, your budget, and your lifestyle.

Even if Gen Xers are topping other generations (by a hair) in their level of credit card debt, getting free of unwanted financial obligations is something anyone can aspire to, no matter when they were born.

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