When you think of credit card debt, you might think of struggling young people just getting started in life. But is that really the case?
Which generation of Americans actually has the most credit card debt? You can find out right here.
The generation with the biggest debt balance
According to research by The Motley Fool Ascent, the generation that owes the most is Gen X, followed by baby boomers, millennials, the Silent Generation, and finally Gen Z. Here is exactly how much each generation owed on average as of the second quarter of 2023.
- Gen Z: $3,148
- Millennials: $6,275
- Gen X: $8,870
- Baby boomers: $6,601
- Silent Generation: $3,434
Gen X, which is between the ages of 42 and 57, clearly has a far bigger balance than most of their fellow Americans. At first, it may seem surprising that middle-aged people would owe more than younger or older people. But remember, this is often an expensive time of life. Many people in this age range are raising young children, have a mortgage to pay, and have lots of other responsibilities that cost money.
While you may be surprised by how much Gen X owes, it’s also worth noting that every generation owes a good amount. Since credit card debt is an expensive form of debt, people of all ages should try to pay down these balances to free up more money for other goals.
How to get your credit card balance under control
If you don’t pay off your credit card in full each month, you’re losing a lot of money to interest. In fact, the average interest rate as of May 2024 was 21.51%, which is very high.
You shouldn’t be giving your creditors so much money each month. If you do, you cheat yourself of the opportunity to make the best use of those funds. So if you owe money, it’s time to get serious about a debt payoff plan.
One option worth considering is to use a 0% APR balance transfer card or a personal loan to pay back your current credit card debt. While this isn’t a solution to becoming debt-free right away, it does allow you to reduce your interest rate to make debt payoff more affordable. If you can qualify for a 0% balance transfer card or a lower interest personal loan, more of your money will go toward actually reducing your balance.
You should also start making extra payments toward your debt. If you pay extra, more money will also go toward reducing the balance each time so you’ll become debt-free much faster.
Free up some extra cash by making some temporary cuts in spending if you can, or even picking up a few extra hours of work. Credit cards can really suck your bank account dry, so it’s absolutely worth some short-term sacrifices to stop enriching your creditors.
Once you’ve paid your balance down, commit to not carrying a balance again. This doesn’t mean giving up credit cards and all the perks they offer. Instead, you should track how much you’re spending, stick to your budget, and ensure you can pay off your bill in full every time.
You can do your part to bring down your generation’s average credit card balance — and make a huge improvement in your finances — if you use cards as a tool to earn rewards and benefits but don’t make your credit card company richer with interest you pay at the expense of your own financial security.