Gen Z Debt Outpaces Millennials at Same Age

Gen Z consumers hold higher debt balances than Millennials did at the same age, according to TransUnion data cited by Money Management International.

Ted Rossman, a credit counseling expert with the nonprofit agency, reported a 35% rise in client requests from Gen Z over the past year. He noted that the debt loads of this demographic have climbed 12% in the same period.

Rossman attributed the increase to student loans, high rent, and the growing use of buy now, pay later plans. These costs leave many young adults with little savings and living on a paycheck-to-paycheck basis.

"That’s really showcasing a lot of these early career pressures," Rossman said. "You have student loans, you have high housing costs. Those household formation years are very expensive, so GenZer’s actually have more debt than Millennials did at the same age, even adjusted for inflation according to TransUnion."

The expert advised clients to track their budgets and monitor installment spending. While buy now, pay later options often offer short interest-free periods, Rossman warned that the money is still debt. He cautioned that interest rates on credit cards frequently reach 20%, making oversight essential.

Rossman said individuals who feel overwhelmed by their obligations can contact the agency for assistance.