4 Key Factors Leading Millennials to Miss Credit Card Payments

Credit card debt in the U.S. hit a record high of over $1 trillion in the last quarter of 2023, according to TransUnion. Generation X holds the largest share of this debt at 33.8%, but millennials opened the most new credit card accounts last year. Unfortunately, millennials also have the highest rate of credit card delinquencies, surpassing pre-pandemic levels from 2019.

Millennials face several financial challenges, including auto loans, student loan debt, and high credit card balances. They entered the workforce during the 2008 Great Recession, which meant they didn’t have the job stability that Boomers experienced. Many struggled to find jobs or were laid off early in their careers. Additionally, they are still paying off older debts while opening new credit accounts to manage life during and after the pandemic.

Student loan debt is another significant burden. Millennials were encouraged to pursue higher education as a path to a stable career, but the Great Recession made it difficult to find jobs after graduation. As of 2023, millennials hold about 30% of all student loan debt, which is less than Gen X but more than Gen Z and Boomers combined.

Housing costs are also a major issue. While Gen X may have had more opportunities to buy homes when prices and interest rates were lower, millennials face rising rent prices, making it harder to stabilize their housing costs.

Millennials are in an expensive phase of life, trying to buy homes, raise children, and save for college simultaneously. The return of student loan payments, ongoing inflation, and high housing costs make it challenging for them to manage their finances effectively.