Study Reveals Credit Card Debt Struggle Among Millennials

Advertiser Disclosure

The credit card debt struggle among Millennials is prevalent according to the New York Federal Reserve. The overall credit card debt in the U.S. grows and with it, credit card delinquencies increase. Millennials are not only juggling credit card debt but also student and auto loans. Here’s what you need to know.

Millennials Struggle With Credit Card Delinquencies

It is no secret the U.S. household debt has reached $17.29 trillion in Q3 2023. According to the Federal Reserve Bank of New York, the rise in household debt is ushered by mortgage, credit card, and student loan balances. Credit card balances alone have reached a record-high of $1.08 trillion. The $154 billion year-over-year gain in debt is the largest increase since the start of its series in 1999. The 90-day delinquency rate measure for credit cardholders has also increased to 5.78% from 3.69% a year prior. Particularly, the delinquency rate increase is most prominent among millennials and consumers with student or auto loans.

The recent data on millennial credit card debt happens simultaneously with the three-year federal student loan payment pause, which ended in October 2023. The combination has an alarming effect on borrowers. Mainly the younger Americans struggling to dig themselves out of credit card debt. Add inflation to the mix, and you have a cauldron of contributing factors brewing an unexpected increase in delinquencies. The New York Fed reported that some student loan borrowers expected challenges repaying their loans. Borrowers with both student debt and an auto loan made up the majority of consumers with delinquency.

Past Due Credit Card Payments Spike Up

In the third quarter, 2% of credit card users shifted to 30 or more days past due. The shift is a 1.6% increase from the first and second quarters in 2023. Out of every debt category analyzed in the New York Fed study, the 90 days or more past due payments category shows the highest change increase. Up from 0.94% a year ago, the study found delinquencies hit a high of 1.28%.

The rise in delinquencies was mainly driven by Millennials born between 1980 and 1994. Millennial payment delinquencies began rising to pre-pandemic levels in mid-2022. In contrast, Gen Z, Gen X, and baby boomers maintained pre-pandemic delinquency levels.

The interest rate hikes over the last 18 months may be to blame for the rise in delinquencies. To control inflation, the Fed’s campaigned for higher interest rates. Meanwhile, consumers turned to credit cards. The higher living and shelter costs may have led to an increased reliance on credit. As a result, the study found credit card balances have risen for eight consecutive quarters. The study also uncovered that lower-income households were also impacted harshly. The borrowers in the lowest earning regions in the US were more likely to be behind on their payments.

“The largest increase in their delinquency rates”

“Millennials have seen the largest increase in their delinquency rates and now have rates definitely above pre-pandemic levels,” New York Fed researchers said in a press call. “Given the strong labor market and general economy these increases are somewhat surprising. Understanding the cause of this shift — whether they reflect loosening of standards over the past years or overextension — is something we intend to dig into and monitor.”

“There’s a lot of overlap between millennials and auto loans and student debt. Millennials have a fairly significant amount of student debt, and there’s a decent bit of new originations of auto loans during the pandemic when prices were high,” New York Fed researchers said in a press call. “We can see that overlap correlates with higher delinquency rates.”

Related Article: Should You Pay Off Your Credit Card Debt with a 401k Loan?

Featured image by Yuliya Taba/Getty Images Signature


Editorial Disclosure – The opinions expressed on's reviews, articles, and all other content on or relating to the website are solely those of the content’s author(s). These opinions do not reflect those of any card issuer or financial institution, and editorial content on our site has not been reviewed or approved by these entities unless noted otherwise. Further, lists credit card offers that are frequently updated with information believed to be accurate to the best of our team's knowledge. However, please review the information provided directly by the credit card issuer or related financial institution for full details.

About: Jeannyn Gomez
Jeannyn Gomez

Jeannyn is the Content Management Assistant for In addition to serving on all aspects of social media and spreading the word on expert credit and personal finance advice, Jeannyn finds herself on quests for humor, supernatural phenomena, and conspiracy theories for fun.

Advertiser Disclosure

BestCards is an independent, Florida-based credit card comparison platform. Many of the card offers that appear on this site are from companies from which BestCards receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). BestCards does not include all card companies or all card offers available in the marketplace.