Gen Xers Have Highest Average Credit Card Balances, Gen Zers Have Lowest

Age matters not only for wine and cheese, but also for credit card use. With shorter credit histories and lower incomes, younger people generally have less access to credit. Meanwhile, adults in their peak earning years with longer credit histories often have higher credit limits and run up higher credit card balances.

LendingTree researchers examined credit card balances by generation, discovering Gen Xers have the highest average at $6,527. Meanwhile, Gen Zers have the lowest average balances at $1,857.

Read on to learn about generational breakdowns around credit card use.

Key findings

• Gen Xers have the highest average credit card balances, while Gen Zers have the lowest. Gen Xers have average credit card balances of $6,527 — $530 more than baby boomers. Gen Zers have average credit card balances of $1,857 — $2,231 less than millennials.
• On average, older Americans have more credit cards, contributing to them having the highest average credit card balances. Gen Xers and baby boomers have an average of 5.5 credit cards, more than double that of Gen Zers (2.5).
• While younger Americans have lower credit card balances, they also have low credit limits — leading to the highest utilization rates. Gen Zers have an average utilization rate of 32.5%. That’s more than double that of baby boomers (14.3%), who have average credit card limits more than seven times higher than Gen Zers.
• Gen Zers in Rhode Island and baby boomers in Vermont (both Northeastern states) and millennials in Wyoming and Gen Xers in Alaska (both Western states) have the highest average credit card balances. Among the states with the lowest average credit card balances by generation, the Midwest and West are represented.

From X to Z: Gen Xers have highest average credit card balances, while Gen Zers have lowest

With average credit card balances of $6,527, Gen Xers are at the top — just ahead of baby boomers at $5,997. Of the four generations analyzed, Gen Zers have the lowest average credit card balances at $1,857. Average credit card balances among millennials ($4,088) are more than double that of Gen Zers.

However, LendingTree chief credit analyst Matt Schulz cautions against reading this as an indicator of indebtedness.

In fact, according to median weekly earnings data from the U.S. Bureau of Labor Statistics (BLS), the average credit card balances that LendingTree found generally correlate with higher earning potential. Those with higher cash flow will logically run higher balances, or may have additional expenses, such as child care. Meanwhile, younger people with less work experience may have lower incomes and, consequently, lower balances.

Members of Gen X are likely in their peak earning years, so it’s not surprising they would also have the highest average credit card balances.

As more baby boomers approach retirement and see their incomes decrease, it’s plausible that the gap in average balances between Gen Xers and baby boomers will continue to widen. Similarly, as more millennials age into their peak earning years, their balances may increase.

Generational median credit card balances reflect same trends with less distortion

By contrast, the median represents the middle value in a dataset. “Looking at the median balance eliminates the extremes and gives you a clearer picture of what the typical person actually owes,” Schulz says.

At $2,730, Gen Xers have the highest median credit card balances, followed by baby boomers, millennials and Gen Zers, respectively. However, the difference between the generations is smaller.

For example, millennials’ median credit card balance is only $1,234 less than Gen Xers, while the generational gap by average was nearly twice that at $2,439. This suggests that the median figure is more representative of older millennials aging into peak earning years.

Gen Xers, baby boomers have highest average number of credit cards

The average number of credit cards by generation aligns closely with generational average balances. Gen Xers and baby boomers have the highest average number of credit cards at 5.5 per person. Millennials have an average of 4.1 cards, while Gen Zers have an average of 2.5 cards.

This suggests that people with higher balances often have multiple cards. Although there’s a correlation between more cards and higher balances, Schulz explains that a likely reason why older generations may have more credit cards on average is that they have the advantage of having a longer credit history.

A longer history of on-time payments will help boost your credit score and may make someone from an older generation more attractive to credit card companies looking to lend.

When looking at the median number of credit cards rather than the average, the generational breakdown by the number of credit cards remains consistent. However, the numbers decline a bit.

Gen Xers and baby boomers’ median number of credit cards drops to 4, compared with an average of 5.5 cards. Millennials drop from an average of 4.1 to a median of 3, while Gen Zers drop from 2.5 to 2. This suggests that there are individuals whose higher number of credit cards somewhat skew the average among millennials, Gen Xers and baby boomers.

Baby boomers have lowest average credit utilization rates

Balances and numbers of cards don’t tell the full story of credit card use by generation — that’s where credit utilization comes into play. Credit utilization is displayed as a percentage, representing the amount of credit you’re using relative to your available total. It’s a common measure of how well you can manage your repayments.

Of the four generations studied, Gen Zers have the highest average credit utilization at 32.5% — meaning that, on average, members of Gen Z are using roughly a third of their available credit each month.

Just as the average number of credit cards generally increases by generation, credit utilization generally declines as generations age — for similar reasons. Older generations have had more time to prove their responsibility by paying back credit cards and other loans, such as student loans, mortgages or personal loans. As a result of their track records, credit card lenders are more willing to extend higher credit limits.

Millennials have an average credit utilization of 24.4%, Gen Xers have an average utilization of 21.7% and baby boomers have the lowest average utilization rate at 14.3%.

“Someone just getting started may owe just $500 on their card, but since their available credit is just $1,000, their utilization is a sky-high 50%,” Schulz says. “On the other hand, someone else may owe $5,000, but since they have $25,000 in available credit, their utilization rate is a relatively comfortable 20%.”

When you compare the farthest ends of the generational spectrum — baby boomers and Gen Zers — Schulz’s comments explain why baby boomers have credit utilization rates more than half those of Gen Zers.

Baby boomers, Gen Zers keep average balances low in Wyoming, but millennials don’t

The list of states with the highest average balances by generation features several repeats. Hawaii has the dubious honor of ranking among the five states with the highest average balances most frequently: It appears on the top 5 list among Gen Zers, millennials and Gen Xers. Alaska, New Jersey, Connecticut and Maryland rank in the top 5 on two different generations’ lists.

Rhode Island Gen Zers have the highest average balances, while baby boomers run up the highest average balances in nearby Vermont.

Wyoming is an unusual case. Among millennials, Wyoming residents have the highest average credit card balances — yet, its residents have the lowest average balances among baby boomers and the second-lowest among Gen Zers.

Wyoming’s nickname may be the Equality State, but it appears to be anything but when it comes to the generational breakdown of average credit card balances.

In addition to Wyoming appearing on the list for multiple generations’ lowest average credit card balances, Kentucky holds the honor of recurring on the list among millennials, Gen Xers and baby boomers. Idaho is featured among the lowest for Gen Zers and baby boomers, while Arkansas is for Gen Zers and millennials.

State data: Credit card breakdowns by generation

Gen Zers

Millennials

Gen Xers

Baby boomers

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Methodology

Analysts used data from more than 250,000 anonymized credit reports of credit card holders from February 2022 to calculate the average and median credit card balances, average credit card limits and average utilization rates for the four major adult generations. Analysts also looked at the average and median number of credit cards held by each generation.

Using definitions from the Pew Research Center, generations were defined as:

• Generation Zers (1997 to 2004)
• Millennials (1981 to 1996)
• Generation Xers (1965 to 1980)
• Baby boomers (1946 to 1964)

To provide context within the study, we associated general age ranges based on the birth years and when the data was collected in February 2022. That breaks down as follows:

• Gen Zers: 18 to 25
• Millennials: 26 to 41
• Gen Xers: 42 to 57
• Baby boomers: 58 to 76