Gen Z is carrying more credit card debt than any other generation

It may not feel like it to some, but generational mobility is still alive and well in the United States, according to a new report from H&R Block.

The company’s 2024 Outlook on American Life Report, published earlier this week, finds that Americans are, by and large, optimistic about their finances and the economy and that they’ll ultimately be better off than their parents were at a similar age. Interestingly enough, while many Americans have pointed their collective fingers at inflation as the primary cause of their economic pessimism in recent years, the report finds that debt, instead, is the primary “anchor dragging on American prosperity.”

The data bears that out: Gen X carries the most credit card debt of the generations analyzed (beating out Millennials, Boomers, and Gen Z), but the report also finds that Gen Z “feels the most burdened.” Further, of the individuals who report holding credit card debt, roughly two-thirds say their credit card debt is “unmanageable.” Add student debt into the mix, too, and it’s clear that young people are struggling with debt loads, perhaps more so than ever before.

The report draws from aggregated and anonymized tax return data from 11.4 million tax filers and four nationwide surveys of more than 7,800 people this past summer. That included roughly 1,500 members of Gen Z, who are between the ages of 18 and 28.

Despite the apparent trouble with debt experienced by many members of the Gen Z cohort, the report has plenty of bright spots for the youngest demographic. For example, 70% of Gen Z respondents say they agree on some level that they expect to have “greater economic opportunities than my parents had,” the highest of any generational subset. Gen Z also saw the most significant relative increase in earnings between 2022 and 2023, with an average increase in adjusted gross income of 30% — compared to 11% for Millennials, the second-highest subset. Finally, 60% of Gen Z respondents expect their financial situation to look better next year.

One reason that some people may be feeling optimistic? They’re not having kids, and realizing significant savings as a result.

The report notes that it costs more than $237,000 on average to raise a child to adulthood and that “the number of Millennials—taxpayers in their childbearing years—who file as DINKS (double-income-no-kids) has more than doubled in less than a decade, from 7% in 2015 to 16.7% in 2024.”