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Younger generations are widely thought to be averse to credit—but that's not necessarily true when it comes to credit cards.
Members of the millennial generation—people between ages 23 and 38—increased their average credit card debt by 7% in the past year, according to recent data from Experian. That's the second-largest increase in credit card debt among all generations in the past year, and the spike could show that younger consumers are becoming more comfortable using plastic as a payment method.
As part of our larger look at credit card debt, and to see how millennials use credit cards, Experian reviewed credit data from the first quarter (Q1) of 2019, comparing it with historical records to identify how the generation spent compared with its peers. Read on for our insights and analysis.
Millennial Credit Card Debt Is Lower Than Average, but Rising
Millennials across the U.S. carried an average of $4,712 each in credit card debt in Q1 2019, according to Experian data. And while that's less than the national average of $5,474, the tides might be changing, as millennials saw one of the largest increases in credit card debt in the past year.
Millennials weren't the only generation to see a significant increase in their credit card balances in the past year. Generation Z—people between ages 18 and 22—saw average credit card debt increase by 11% since Q1 2018, from $1,851 to $2,057, the highest of any generation. The only other generation to see an increase in credit card debt was Generation X, whose balances increased 3% from $7,781 to $8,023.
Older generations—baby boomers and the silent generation—both saw a 1% decline in credit card debt since Q1 2018.
Among Millennials, Credit Card Debt Increases With Age
As younger millennials still may be in the early stages of their credit journey, it's no surprise that credit card debt increased as these consumers aged. The youngest millennials, age 23, carried an average credit card balance of $2,288, while the oldest, age 38, carried an average balance of $6,675 in Q1 2019.
Millennials in Alaska Carry Highest Average Credit Card Balance
In line with the national trend, Alaska was home to the millennials with the most credit card debt. Alaska has the highest credit card debt of any state, with consumers carrying an average of $7,726 in Q1 2019.
Millennials in Alaska had an average of 2.6 credit card tradelines, or credit accounts, across which they carried an average of $5,637 in debt in Q1 2019, according to Experian data. That's more than the national average and significantly more than the average for millennials across the U.S.
|States With the Highest Millennial Credit Card Debt|
|State||Average FICO® Score*||Average Credit Card Balance||Average Total Debt|
Source: Experian Q1 2019 data
Puerto Rico and Mississippi Have Lowest Millennial Credit Card Debt
Millennials in Puerto Rico carried the least amount of credit card debt of any state, with an average balance of $2,906 per person, in Q1 2019. Mississippi millennials had the second-lowest debt, with an average credit card balance of $3,887.
These balances were considerably lower than the states' averages across all generations: Mississippians carried an average $5,030 in credit card debt, and Puerto Ricans had an average of $3,678 in credit card balances.
|States With the Lowest Millennial Credit Card Debt|
|State||Average FICO® Score||Average Credit Card Balance||Average Total Debt|
Source: Experian Q1 2019 data
While many millennials struggling with credit may be looking for ways to pay off debt as balances rise, others continue to seek ways to finance purchases and build credit history through acquiring credit cards and seeking loans such as mortgages and auto loans. Time will reveal how this generation prepares itself for the future.
Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. MSA is the acronym for metropolitan statistical area, which groups counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
*Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.