Millennials are racking up debt faster than any other generation!
After delaying marriage, homebuying and kids longer than any other generation, some millennials are finally opting for the traditional middle-class lifestyle — but they’re piling up a mountain of debt to make it happen.
Since 2019, American millennials in their 30s have seen their total debt load rise 27% to $3.8 trillion as of the fourth quarter of last year, according to the New York Fed. This was the largest increase of any age group measured over this time span, and marked this cohort’s fastest pace of debt accumulation over any three-year period since 2008, The Wall Street Journal reported.
This debt load is beginning to takes it toll — the NY Fed’s report found that millennials are missing credit card and auto loan payments at rising rates.
With inflation and interest rates elevated, it’s become nearly impossible for some millennials to afford a home, a car, or even kids — all markers of the traditional middle-class lifestyle — without taking on a huge debt load.
Even before the pandemic, millennials were reaching these life milestones at later ages than prior generations. While recent affordability concerns have led some to postpone these milestones even further, others — evidenced by their growing debt burdens — have decided to bite the bullet and jump in anyway.
MILLENNIALS ARE STARTING TO MISS CREDIT CARD PAYMENTS
After falling over the last few years as borrowers paid down their balances, US credit card debt rose $61 billion in the fourth quarter, the largest increase in the history of the NY Fed’s data, which dates back to 1999. This increase brought total credit card balances to $986 billion, surpassing the pre-pandemic high of $927 billion.
Inflation has caused many millennial consumers to spend more, save less, and ultimately turn to credit card debt as pandemic-era savings have run out.
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