Millennials and Gen Z rack up credit card balances amid sky-high interest rates 

  • Average credit card balances for Gen Z and millennials increased 62% and 50%, respectively, between Mar. ‘22 and Feb. ‘24
  • On average, millennials have two-times more credit card debt than Gen Z
  • The percentage of Gen Z and millennial with subprime credit scores increased by 7% and 6% respectively from Mar. ‘22 to Feb. ‘24

In November 2023, 56% of Gen Z and 69% of millennials said they were concerned about the current state of the economy, driven largely by inflation, rising interest rates and high debt levels. Now, threats of the Fed not cutting rates at all this year, could put many Gen Z and millennials’ finances in jeopardy.  

According to new data from the Intuit Credit Karma platform, Gen Z and millennial credit card debt is on the rise and increasing at the fastest rates of all other generations. Since the Fed started increasing rates in March 2022, average credit card balances for Gen Z increased 62%, rising from $2,000 to $3,300. Likewise, average credit card debt for millennials increased 50%, jumping from $4,500 to $6,700. Carrying such high balances can become quite costly for cardholders, especially at a time when credit card interest rates are hovering at record highs. Credit is even more costly for consumers with subprime credit (below 600) — a population that is growing among Gen Z and millennials. 

Between March 2022 and February 2024, the percentage of millennials with subprime credit increased by 6%, rising from more than a quarter of millennials to over one-third with credit scores below 600. Similarly, the percentage of Gen Z with subprime credit score rose to 33% in February 2024, up from 25% in March 2022. This swell of subprime consumers could be driven by deteriorating economic conditions which have made it difficult for consumers to make ends meet. 

To that end, Gen Z and millennials across score bands have seen credit scores decline. Overall, average credit scores have gone down 5 points for Gen Z and 8 points for millennials. However, when you look at Gen Z and millennials with credit scores above 600, the drops are more significant. The biggest swings occurred for millennials with credit scores between 660 and 719, whose scores dropped by 26 points, and Gen Z with credit scores above 720, whose scores decreased by 24 points. 

“The cost of living remains elevated, making it difficult for consumers to make ends meet and it’s starting to take a toll on their finances,” said Courtney Alev, consumer financial advocate at Intuit Credit Karma. “At the same time, interest rates hover at record highs, which is driving up borrowing costs for consumers as they become increasingly reliant on credit cards for everyday purchases. As a result, we’re seeing credit card balances tick up and credit scores dip, especially among younger generations. As more young folks slip into lower credit score bands, it could become even more difficult for them to get access to affordable credit. If you’re someone who has racked up a credit card balance, it’s not too late to make a plan for that debt. Start by ensuring that you are making regular, on-time payments toward your balance every single month – even if it’s the minimum payment amount. This will help you avoid negative marks for missed payments. Take a look at your monthly cash flow to see how much you can contribute each month beyond the minimum – increasing your payments each month will help you start slowly chipping away at your debt. If monthly is too overwhelming, consider making smaller weekly or biweekly payments.”        


This study was conducted using anonymized data from the Intuit Credit Karma platform between March 2022 and February 2024. The credit score analysis is based on anonymized data for roughly 41 million members who logged into Credit Karma in March 2022 when the Fed first started to raise interest rates. The credit card balances analysis is based on anonymized data for roughly 80 million members.