Gen Z Debt Levels Exceed Millennial Averages by 12%

Generation Z members hold 12% more debt than Millennials did at the same age, according to inflation-adjusted data from TransUnion. The gap persists despite the passage of time and economic shifts between the two cohorts.

Ted Rossman, a credit counseling expert at the nonprofit Money Management International, reported a 35% increase in demand for services from Gen Z clients over the past year. His agency observes that these debt loads are rising in tandem with that client growth.

The primary drivers of this financial burden include student loans, elevated rent prices, and the widespread use of buy now, pay later plans. Rossman noted that these early career pressures leave many young adults living paycheck to paycheck with minimal savings.

"You have student loans, you have high housing costs," Rossman said. "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."

Rossman advised young adults to monitor their budgets and scrutinize buy now, pay later spending. While these plans often offer short-term interest-free periods, they remain a form of debt. "It can work in your favor.. but just be mindful that it’s not a free lunch," he said.

Creditors and analysts should note that interest rates on credit card debt often range around 20%, adding to the cost of carrying these balances. Rossman also suggested that individuals feeling overextended seek professional assistance to manage their obligations.