Vermont Business Magazine As the youngest consumer generation, Gen Zers are becoming avid credit card users. A new study by LendingTree looked at how young Americans ages 18 to 26 use their credit cards by analyzing 198,000 anonymized credit reports of LendingTree users.
Of note, Gen Z’s average credit card balance has gone up 55.6% since February 2022, while its average credit card limit has climbed 22.2% in the same period.
Vermonters in this demographic rank 3rd in overall balance ($3,361); 31st in credit card limit ($6,490); and 12th in average number of credit cards (3.46).
Full report: lendingtree.com/credit-cards/study/gen-z-usage/
Key findings
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Gen Zers have an average credit card balance of $2,889. That’s up 55.6% from $1,857 in February 2022.
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The highest average credit card balance among Gen Zers is in Hawaii at $3,643. Next are Gen Zers in New York state ($3,571) and Vermont ($3,361). Rhode Island Gen Zers had the highest average credit card balances in February 2022 at $2,824, but the state is now ninth at $3,256.
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The lowest average credit card balance among Gen Zers is in Mississippi at $1,907. The next highest are Alabama ($2,132) and West Virginia ($2,217) Gen Zers. South Dakota Gen Zers had the lowest average credit card balances in February 2022 at $1,126, but the state is just outside the 15 lowest now at $2,609.
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Gen Zers have an average credit card limit of $6,993. That’s up 22.2% from $5,721 in February 2022. Gen Zers’ average credit utilization ratio is 41.3% — meaning they use more than 40% of their available monthly credit.
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The highest average credit card limits among Gen Zers are in the District of Columbia ($8,846), Hawaii ($8,807) and New Jersey ($8,648). The lowest average credit card limits among Gen Zers are in Mississippi ($4,332), Alabama ($4,830) and West Virginia ($5,100).
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Gen Zers have an average of 3.41 credit cards. This is highest in California (3.80), New York (3.76) and New Jersey (3.75) and lowest in Wyoming (2.81), Alabama (2.89) and Mississippi (2.92).
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More than 4 in 10 (40.6%) Gen Zers have opened a new credit card in the past six months.
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98.3% of Gen Zers pay their credit card bills on time every month. However, 5.5% of Gen Zers have a credit card account at least 90 days past due.
Gen Zers’ average credit card balance in February 2023 was $2,889. Gen Z cardholders on authorized accounts have slightly higher average balances than Gen Zers who directly hold their cards ($2,851 versus $2,530), which may have helped drive up the overall average. Still, compared to a LendingTree study that used February 2022 data, Gen Z’s average balances increased by 55.6% year over year from $1,857 — an increase of more than $1,000.
“Inflation and rising interest rates are a major reason for that growth,” says Matt Schulz, LendingTree chief credit analyst. Because Gen Zers are still in school or getting started with their careers, lower incomes and a limited credit history mean the credit they can get usually comes with really high interest rates — which can easily lead to credit card debt. “That adds up to a tough situation.”
Average credit card balances by state (Gen Zers)
|
Rank |
State |
Average credit card balance |
|---|---|---|
|
1 |
Hawaii |
$3,643 |
|
2 |
New York |
$3,571 |
|
3 |
Vermont |
$3,361 |
|
4 |
Alaska |
$3,336 |
|
5 |
California |
$3,328 |
|
6 |
New Jersey |
$3,307 |
|
7 |
Connecticut |
$3,299 |
|
8 |
District of Columbia |
$3,283 |
|
9 |
Rhode Island |
$3,256 |
|
10 |
Colorado |
$3,208 |
|
11 |
Arizona |
$3,202 |
|
12 |
Florida |
$3,144 |
|
13 |
Massachusetts |
$3,127 |
|
14 |
Virginia |
$3,002 |
|
15 |
Washington |
$2,991 |
|
16 |
Nevada |
$2,934 |
|
17 |
Utah |
$2,922 |
|
18 |
Maryland |
$2,920 |
|
19 |
Maine |
$2,916 |
|
20 |
Texas |
$2,908 |
|
21 |
New Mexico |
$2,895 |
|
22 |
North Dakota |
$2,884 |
|
23 |
New Hampshire |
$2,875 |
|
24 |
Tennessee |
$2,830 |
|
25 |
Pennsylvania |
$2,802 |
|
26 |
Minnesota |
$2,785 |
|
27 |
Louisiana |
$2,781 |
|
28 |
Illinois |
$2,775 |
|
29 |
Montana |
$2,737 |
|
30 |
North Carolina |
$2,715 |
|
31 |
Oregon |
$2,691 |
|
32 |
Georgia |
$2,653 |
|
33 |
Ohio |
$2,650 |
|
34 |
Michigan |
$2,637 |
|
35 |
Nebraska |
$2,629 |
|
36 |
South Dakota |
$2,609 |
|
37 |
Idaho |
$2,598 |
|
38 |
Delaware |
$2,553 |
|
39 |
Kansas |
$2,523 |
|
40 |
South Carolina |
$2,500 |
|
41 |
Iowa |
$2,450 |
|
42 |
Wisconsin |
$2,440 |
|
43 |
Indiana |
$2,352 |
|
44 |
Kentucky |
$2,333 |
|
45 |
Wyoming |
$2,332 |
|
46 |
Oklahoma |
$2,312 |
|
47 |
Arkansas |
$2,284 |
|
48 |
Missouri |
$2,276 |
|
49 |
West Virginia |
$2,217 |
|
50 |
Alabama |
$2,132 |
|
51 |
Mississippi |
$1,907 |
Click here for the full report.
3.30.2023. Charlotte, NC. LendingTree, LLC