Gen Z debt exceeds Millennial levels

Gen Z adults carry higher debt loads than Millennials did at the same age, even after adjusting for inflation, according to TransUnion data.

Ted Rossman, a credit counseling expert with the nonprofit Money Management International, cited the data to explain a sharp rise in young clients seeking financial help. The agency reported a 35 percent increase in demand from Gen Z customers over the past year. Their total debt is now 12 percent higher than it was a year ago.

Rossman attributed the rise to the cumulative weight of student loans, high rents, and buy now, pay later plans. He noted that many young adults are living paycheck to paycheck with little savings.

“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.”

Rossman advised young adults to start with budgeting and to monitor their use of buy now, pay later services. While popular among people in their 20s, these arrangements still constitute debt. He cautioned that interest-free periods require immediate payments followed by subsequent installments, which can lead to overspending if not managed carefully.

He also warned about interest rates on credit card debt, which often reach the 20 percent range. Rossman said individuals who feel overwhelmed by their obligations can seek assistance from counseling agencies.