Gen Z Has the Highest Debt Delinquency Rate — Here’s How They Can Fix it
Written by
Laura Bogart
Edited by
Kristen Mae
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Gen Z is known for a lot of great things, from their full embrace of new technology to their rather, um, inventive contributions to the English language (cheugy, anyone?). Unfortunately, Zoomers are also rapidly becoming known for another claim to fame: They’re taking on more credit card debt delinquency than other generations.
While a recent report from the Federal Reserve Bank of New York’s Center for Microeconomic Data indicated that credit card delinquency is on the rise across the board, it pointed the finger at Gen Zers as having maxed out their balances before their older peers. Big yikes, fam.
So why is this otherwise intelligent and resourceful generation falling behind on their credit card payments? The reasons range from the rising cost of living to pressures to maintain a curated, Instagram-worthy lifestyle. The good news? There are actionable steps Gen Z can take to regain control of their finances and avoid long-term consequences.
Learn How To Budget
Many Zoomers were never taught how to create a budget, let alone one that prioritizes paying down debt. Without understanding how to effectively allocate funds for their daily necessities, it’s all too easy to whip out the credit card for groceries or utility bills — accumulating debt in the process.
Thankfully, technology offers solutions. From spreadsheets to apps, Gen Z has quick access to tools that simplify budgeting. Popular budgeting apps like YNAB (You Need a Budget), Oportun, Goodbudget Budget Planner, and Wally can help track spending and allocate resources more effectively. Countless TikTok and Instagram creators share their expertise on money management, from building budget spreadsheets to reducing grocery bills by making all your meals from Dollar Tree ingredients to learning to invest to grow real wealth.
Get Financially Literate
Before lamenting their credit card debt, it’s important to recognize that a lot of Gen Zers likely lack a baseline of financial literacy. Many of the financial experts their parents trusted are older, and Zoomers might not find their advice applicable to today’s economic climate.
Connecting with relatable financial educators who are closer to their generation, like Tori Dunlap (Her First $100K), Taylor Price (Tap Intuit), Melissa Jean-Baptiste (Millennial in Debt), and Caleb Hammer can help Gen Z build a foundation of financial knowledge. They can also get practical and applicable insights about how to pay down debt within a smart, strategic budget.
Stop Impulse Purchases
The modern version of “Keeping Up with the Joneses” isn’t as much about having a gorgeous house or flashy car as it is taking vacations that will make your Instagram followers drool with envy. Social media bombards Zoomers with messages that they’re not cool enough, or living a great life, if they’re not taking expensive trips or buying specific clothes, makeup, or electronics. It’s enough to make a Gen Zer yeet their common sense out the window and spend, spend, spend.
But taking a step out of the hole of credit card debt means taking a step back before making a purchase. A trick that works across generations is to wait several days before making nonessential purchases — often, when it’s not directly in front of your face, the urge to have it fades.
Adjusting social media consumption would also be a great way for Zoomers to get over their financial FOMO. Unplug from content about lavish lifestyles and instead opt for creators promoting underconsumption or challenges like “No-Buy 2025.”
Prioritize Paying Down Debt
This one is a no-brainer. For Gen Zers looking to get out of debt, they’ve got to pay that debt down as quickly and responsibly as possible. This may require sacrifices, like splitting rent with roommates or shopping at lower-cost grocery stores like Aldi or Lidl. These adjustments can free up funds to tackle credit card balances.
Gen Z should also look into specific techniques for paying down debt — and they’re everywhere on TikTok and Instagram, where other Zoomers and Millennials share their stories and approaches for getting out of credit card debt, including direct conversations with their credit card companies to negotiate lower payments. Debt repayment strategies, such as the debt snowball and debt avalanche methods, are also described in detail on social media.
Getting out of credit card debt isn’t easy, but it’s worth the effort. With budgeting tools, financial literacy, and disciplined spending, Gen Z can turn things around and secure a brighter financial future. After all, being debt-free? That’s totally bussin’.
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