Young Americans Drive Credit Card Spending Surge Amid Rising Costs
Gen Z and millennials lead credit card spending growth as living costs rise and financial strain grows.
2 min read
Young Americans are increasingly relying on credit cards to manage rising living costs, with Gen Z and millennial customers recording the fastest growth in credit card spending at Synchrony Financial during the third quarter. The company reported a 8% increase in purchase volume to $49.7 billion, driven largely by younger consumers facing mounting affordability pressures.
Financial Strain on Younger Generations
Rising expenses and elevated borrowing costs have strained household budgets, with Federal Reserve research showing nearly half of Americans under 30 received financial assistance with expenses in 2025. Synchrony CEO Brian Doubles noted that spending increased across generations and credit categories, with the fastest growth among younger customers.
Consumers are also spending more without necessarily purchasing more goods. Synchrony attributed part of its 9% purchase-volume growth in its Home & Auto division and 13% growth in its Diversified & Value division to rising gasoline prices. This trend highlights how inflation and higher prices are influencing spending patterns.
Broader Financial Pressures
The financial challenges facing younger Americans extend beyond credit cards. A Federal Reserve survey found that 47% of adults ages 18 to 29 received help from someone outside their household to cover expenses in 2025, including housing, utilities, transportation, and everyday purchases. Additionally, 49% of adults under 30 lived with a parent, a 12 percentage point increase since 2019.
Nearly one-quarter of Americans ages 18 to 29 failed to pay all their bills in full during the month preceding the survey. Housing affordability has further compounded these challenges, with home prices increasing 54% nationally since 2020, while nearly half of renter households spent more than 30% of their income on housing.
Inflation and Wage Stagnation
The pressure intensified in September as consumer prices rose 3.7% from a year earlier, while inflation-adjusted average hourly earnings fell 0.7%. Federal Reserve data also revealed a widening divide between financially comfortable Americans and those struggling to make ends meet. Average credit card balances among respondents who reported difficulty getting by increased 37%, or $2,530, between 2023 and 2025, while balances among those living comfortably increased just 1%, or $59.
Carrying that debt remains expensive, with the average interest rate on credit card accounts assessed interest reaching 22.36% in August. The Fed’s household survey found that 46% of credit card holders ages 18 to 29 carried a balance at least once during 2025.
Synchrony’s outstanding loans increased 3% to $103.3 billion in the third quarter, although its delinquency figures offered a more encouraging picture. Loans at least 30 days past due declined to 4.34% from 4.39% a year earlier, while loans at least 90 days past due fell to 2.06% from 2.12%.
Source: Daily Caller
