NASHVILLE, Tenn. (WTVF) — As costs continue to rise more and more Americans are falling behind on bills. New research shows cost of living is the toughest on young adults, specifically Gen-Z.
Data from the Federal Reserve Bank of New York and shows while many Americans of all ages are struggling, high inflation and interest rates are hitting young adults the hardest. Industry analysts say it's because many have lower incomes and worse credit scores, so they're turning to their credit cards to make payments, and are reaching their spending limits.
The numbers show about one in seven borrowers have maxed out their credit cards- about 14%.
For Gen-X the number is 9.6% and for Baby Boomers the number is under 5%. Senior Industry Analyst Ted Rossman says Gen Z tend to have lower credit limits because they're newer to credit, so it's easier to max out.
"It does seem to be hitting young adults the hardest, because they have lower incomes. They have lower credit scores. There's a record amount of young adults who are living with parents because these household formation costs have really never been higher."
Millennials are also having a hard time making ends meet with some carrying as much as twice the credit card debt Gen Z has.
A third of maxed out borrowers have gone delinquent in the last year, compared to less than a quarter before the pandemic. Severe delinquencies, which are those that are 90 days overdue, are at the highest levels since 2012.
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- Rebecca Schleicher
