Young Americans maximize credit card spending


The Federal Reserve Bank of New York said this week that Gen Z is more likely to max out their credit cards, with more than 15% using nearly every available credit card.

The bank, which is part of the broader Federal Reserve system, defines Generation Z as those born between 1995 and 2011.

In its quarterly report on household debt and credit for the first quarter of 2024, released on Tuesday, the Federal Reserve Bank of New York found that Gen Z has a median balance of $760 and a median credit limit of $4,500, with 15.3% of Zoomer consumers exceeding cap their credit cards, defined as using 90% or more of their available credit limit.



Overall, 23% of total credit available nationwide is used, but utilization rates vary. For example, while 52% of borrowers used less than a fifth of their available credit in the first quarter of 2024, 18% had maxed out their credit cards.

Compared with Gen Z, Millennials have an exhaustion rate of 12.1%, Gen X at 9.6%, and Baby Boomers at 4.8%.

The report also found that poorer people were more likely to max out their credit cards, with 12.3% of those in the bottom income quartile doing so in the first quarter of 2024, compared with 12.3% of those in the second income quartile. 10.2%.

The New York Fed highlighted the “maxed out” category because people in this category are more likely to default on their credit card payments.

The median credit utilization rate last quarter among newly delinquent borrowers was 90%. The New York Fed said delinquency rates have also risen sharply since the outbreak began, with one-third of balances related to nonpayment by users with excess balances, compared with less than a quarter before the outbreak. .

According to CNBC, researchers at the Federal Reserve Bank of New York said that 8.9% of credit card balances nationwide fell into delinquency in the past year. Americans owe a total of $1.12 trillion in debt.





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