Gen Z's growing comfort with credit cards has led to unprecedented levels of debt, raising concerns about the financial health of young Americans.
Recent data from TransUnion reveals a troubling trend: Gen Z consumers aged 22-24 now carry an average credit card balance of $2,834 - a stark 26% jump compared to what millennials held at the same age a decade ago.
The story of Timothy Danikowski illustrates this growing crisis. After landing an accounting job in Seattle and moving into his own apartment, Danikowski opened his first credit card for emergencies. Within three years, he accumulated $15,000 in debt across three cards, with one charging a crushing 28% interest rate.
"When I travel, I want to go shopping, and that's where the spending gets out of control," Danikowski explained, describing how his initial financial discipline gave way to compulsive shopping and travel expenses.
The TransUnion study highlights how Gen Z differs from previous generations in their credit card usage. Young consumers are not only opening more cards but are also more likely to miss payments and use credit for a wider range of purchases.
While Gen Z's total debt remains lower than older generations, their increasing reliance on credit poses serious risks to their long-term financial stability. Many, like Danikowski, find themselves trapped in a cycle of minimum payments that barely touch their principal balance.
"When it comes to everyday things, I choose comfort over everything else," Danikowski admitted, reflecting a mindset that financial experts warn could lead to lasting consequences for Gen Z's economic future.
As interest rates remain high and living costs continue to rise, this generation's growing credit card debt represents a mounting challenge that could shape their financial trajectories for years to come.