Consumers often feel pressured to maintain a standard of living, which can be difficult in uncertain economic times with higher prices and interest rates. Keeping up with the Joneses can lead to mounting debt as U.S. consumers buy cars, take out mortgages and indulge in other spending.
Of all generations, there’s one that has more debt than the rest: Generation X.
A Generation X consumer must work, on average, almost four full years to pay off all outstanding debts, compared to 3.3 years for millennials and two years for Gen Z, the youngest generation, and slightly more than baby boomers and seniors.
Born between the early 1960s and early 1980s, most Gen X consumers have a home mortgage, own a car they pay for in installments, among other consumer loans, and have had several credit cards for years, making this the most indebted generation. Nevertheless, their high income level and relative financial stability make them an attractive segment for certain credit products.
About the Numbers
These are some of the key data and insights drawn from “The Credit Accessibility Series: Economic Malaise Exacerbating U.S. Consumer Debt Levels,” aPYMNTS IntelligenceandSezzleresearch collaboration that explores the characteristics, sentiments and behaviors of consumers’ debt personas divided by generation, as well as the debt impact on credit accessibility, livelihoods and purchasing power.
How Gen X Manages Debt
On average, each Gen X individual holds a debt burden equivalent to 3.97 years of annual disposable income. By disposable income, we mean the total amount of income an individual has available to cover living expenses, make savings or invest. This includes all wages, bonuses, dividends and other sources of income after deducting taxes and other mandatory contributions.
Despite holding the highest level of debt, Gen Xers do not need to use bank overdrafts as much as other age groups. According to otherPYMNTS research, the share of Gen X consumers who attempted a transaction without sufficient funds in the last 12 months before being surveyed was 15%, the second lowest portion among all generations, just lagging baby boomers and seniors. This is because this group, being a mature age in terms of professional development and income generation, owns more financial resources than others.
Likewise, the generation’s specific housing situation reflects similar findings. As illustrated in separatePYMNTS Intelligence research, this age cohort holds the largest share of mortgages, with 45%, compared to 32% of millennials.
Whether it is because of accumulated personal loans or because they have larger mortgages than other generations, 43% of consumers from this generation with low credit scores experienced difficulties or were unable to afford bills due to their lack of credit, a portion that is in line with the overall average. When facing bank overdrafts, credit cards are, for them, the most used product if funds are not available.
See More In: consumer finance, credit, debt, economy, Generation X, Income, loans, mortgages, News, PYMNTS Intelligence, PYMNTS News, sezzle, wages
FAQs
A research collaboration from PYMNTS Intelligence and Sezzle found that Gen X has debt equal to 3.97 years of annual disposable income. The researchers define disposable income as wages, bonuses, dividends and other income sources after deducting taxes and mandatory contributions.
Why does Generation X have the most debt? ›
Born between the early 1960s and early 1980s, most Gen X consumers have a home mortgage, own a car they pay for in installments, among other consumer loans, and have had several credit cards for years, making this the most indebted generation.
What does Gen X struggle with? ›
Generation X faces its unique set of economic challenges, including the aftermath of student loans, the financial strains of the Great Recession, and the dual pressures of caring for children and aging parents.
What generation has the most credit card debt? ›
Credit Card Debt by Age
- Millennials: 29.4%
- Baby boomers: 26.7%
- Generation Z: 6.3%
- Silent: 3.8%
A new report from the U.S. Census Bureau reveals that Generation X — those born between 1965 and 1980 — has quietly climbed to the top of the income ladder. Households aged 45 to 54, a prime Gen X demographic, boast the highest median income at $101,500, surpassing all other age groups.
Why are Gen Xers depressed? ›
When Gen Xers have time to think about themselves, they're often worried about money. Gen X can't afford to put the same trust their parents did in benefit programs like Social Security to provide for them in their old age. Saving for retirement is a huge source of stress.
Which generation created the most debt? ›
By breaking down the average debt by generation as opposed to age, the data shows that, as of 2022, Generation X has the most total debt on average at $154,658, followed by millennials with $115,784.
Why are Gen Xers ignored? ›
Despite being stereotyped as the latch-key generation, content to work independently, Gen X faces significant challenges in the workplace. Their laid-back demeanor might be misinterpreted, leading to them to be overlooked for promotions.
Which generation has the least debt? ›
Americans collectively owe over $1 trillion in credit card debt, with members of Generation X, on average, owing the most and Gen Zers owing the least, CNBC.com Make It reported.
Which generation has the most school debt? ›
While Gen X may not have taken out as much student debt as Gen Zer's have had to, they're the generation shouldering most of the nation's outstanding debt. As of 2021, the average Gen Xer had $46,317 in student loan debt. 1.4 million Gen Xers between ages 35 and 49 carry over $500 billion in student debt.
Asian Americans (92%) and Caucasian Americans (87%) were the most likely demographic groups to hold credit cards.
How much do Gen Xers need to retire? ›
For too many of us, the numbers do not add up: Gen Xers reported that on average they will need roughly $1.1 million in savings to retire comfortably, yet they expect to stop working with only about $660,000 saved–a savings gap of around $450,000. It's important to keep in mind that these are mean figures.
Which generation is the wealthiest? ›
Millennials stand to become the richest generation in history, after $90 trillion wealth transfer | CNN Business.
How old are Gen Xers today? ›
By Michele Debczak | Feb 22, 2024, 6:14 PM EST
| Generation | Time Frame | Age Now |
|---|
| Gen X | 1965-1980 | 44-59 years old |
| Millennials | 1981-1996 | 28-43 years old |
| Gen Z | 1997-2012 | 12-27 years old |
| Gen Alpha | Early 2010s-2025 | 0-approx. 11 years old |
2 more rowsFeb 22, 2024
Americans collectively owe over $1 trillion in credit card debt. But one generation carries the most, on average: Gen X. The average credit card balance for Gen Xers, defined at those between the ages of 43 and 58, rose to $9,123 in the third quarter of 2023, according to Experian's latest available data.
Which age group tends to have the most credit card debt? ›
While Americans 75 and older have the highest average credit card debt, it's likely due to outliers with especially large balances. Their median credit card debt is $2,700, tied for second-lowest with several other age groups. It's Americans from 45 to 54 who have the highest median credit card debt at $3,200.
What age group has the most debt? ›
Gen X (ages 43 to 58) not only carries the most debt on average of all the generations, but is also the debt leader in credit card and total non-mortgage debt.
What is the average credit card debt held by Gen Z? ›
Average Credit Card Debt by Age: Gen Z (Ages 18-27)
Even so, the average credit card debt for Gen Zers was $2,854 in the third quarter of 2022, according to Experian. A year later it had risen 14.3% to $3,262.
