Gen Z debt is rising, why? Detail Explanation

Gen Z is the first generation to grow up with credit cards, and it’s having an impact on their finances. According to a survey from, 46% of Gen Zers report having a balance on their credit card when they check their statements, compared to only 26% of Millennials and 17% of Baby Boomers.

In addition, 37% say they have had trouble paying off their credit card debt in the past year. This means that Gen Z is facing several challenges when it comes to managing their money—and that affects us all!

Here are some reasons why Gen Zers are carrying more debt than other generations did at the same point in life:

They’re the first generation that grew up with credit cards.

Gen Z is the first generation to grow up with credit cards. They’re also the first generation to have a smartphone, and they’re more connected than any other previous generation.

In fact, an estimated 88% of teens own a mobile phone (compared with just 46% in 2004). And while there are many reasons why Gen Z may be more likely to rack up debt than older generations, such as their lack of financial literacy the fact that they’ve been raised in a time of technological advances means that they can get away with more when it comes to spending money online or through their phones.

The fact that Gen Z has grown up in a world of instant gratification means that they’re more likely to expect the same from their financial lives. And this is where credit cards come in handy: They allow teens to buy things immediately without having to save up for them first.

Gen Z debt is rising, why? Detail Explanation

They face a much more competitive job market.

The job market is more competitive for Gen Z than it was for previous generations. They’re competing with older workers and more experienced ones, as well as younger people who are just starting their careers. In addition to all this, they also have to be more qualified than ever before because employers want people who can hit the ground running and make an immediate impact on their company’s bottom line.

As a result of this increased competition in the job market, some experts believe that Gen Z will earn less money over the course of their careers than those who came before them. This could lead some members of this generation toward debt when they choose not to go into higher education or training programs due to cost concerns (which we’ll discuss next).

Gen Z is the first generation to have student loan debt at graduation. This can be a huge barrier to entry for those who want to start their careers after high school or college, but also make it more difficult to invest in further education and training later on down the road.

They don’t trust banks.

One of the main reasons why Gen Z has more debt is that they don’t trust banks. They see them as greedy and corrupt, and they have a bad reputation. Banks are seen as the enemy of the people, and many young people feel like they’re being taken advantage of by their banks.

This distrust goes back to 2008 when the financial crisis hit and left many families without jobs or homes. Since then, millennials have grown up watching their parents struggle with their finances and deal with high-interest rates on credit cards–and now this generation has inherited those issues too!

They are living in an era of economic uncertainty.

Gen Z is also living in an era of economic uncertainty. The global financial crisis and subsequent recession had a lasting impact on the world economy, which has been slow to recover. In addition, we’ve seen the rise of populism and anti-establishment politicians who promise to make sweeping changes that will benefit the people at large–but often come at great cost to those same people. This type of political rhetoric can make it difficult for young adults who are trying to get by financially.

In addition, Gen Zers are facing rising interest rates as well as increased costs for housing and healthcare due to rising inflation rates (and perhaps even more so than previous generations).

READ: 12+ qualities are shared by all successful entrepreneurs [2023]

With all these challenges, it’s no wonder that many young adults are feeling overwhelmed by life. They need a way to cope with their stress and anxiety so they can move forward in a positive direction instead of falling into depression or other mental health issues.

Gen Z debt is rising, why? Detail Explanation

They have spent more time than previous generations in the workforce.

In addition to facing the same challenges as any other generation, Gen Z has had to work harder than previous generations in order to find jobs. They are less likely than older generations to be employed and more likely to have been unemployed at some point during their working lives. This means that when they do get a job, it is more likely that they will be working longer hours and taking on more responsibility for their families’ financial situations as well.

As a result of these challenges, many Gen Zers are more likely than previous generations to feel anxious about their financial situations. In fact, one study found that almost half of Gen Zers say they worry about money at least once a week.

Student loan debt is out of control.

Student loan debt is a problem for many people, but it’s especially problematic for Gen Z.

According to the Pew Research Center, student loan debt has increased by more than 250% since 2005 and now stands at an average of $30,000 per borrower. Student loans are also the second largest source of household debt in America (behind mortgages).

The average college graduate owes just over $40k by graduation day–and that number only increases with time as interest accrues on the principal balance. In fact, nearly two-thirds of borrowers say they’ll need at least 10 years before they can pay off their loans completely!

Their paychecks don’t go as far as they used to.

Gen Zers have the highest student debt of any generation, but it’s not because they’re spending more on tuition. In fact, according to the Institute for College Access and Success (TICAS), Gen Zers are paying less than previous generations did for their undergraduate degrees; their average debt load is just $17,000 compared with $25,000 for Millennials who graduated college in 2016.

Instead, what’s driving up Gen Zers’ student loan balances is that their paychecks don’t go as far as they used to thanks to rising costs of living across many essential household expenses: housing prices have skyrocketed; food costs have increased by nearly 20 percent since 2007; transportation costs are up 12 percent over the same period–and so on.*

College students aren’t immune from these increases either: according to TICAS data collected between 2004-2005 through 2017-2018 school years** , average room and board rates at four-year public institutions increased by 52 percent–from $7000 per year during 2004-2005 school year***

There are several reasons that Gen Z is carrying more debt than older generations.

There are several reasons that Gen Z is carrying more debt than older generations. For one, they’re the first generation to grow up with credit cards. They’ve also been raised in an era of economic uncertainty, which means that many of them don’t trust banks or other financial institutions and instead turn to alternative lending sources like payday loans or student loans.

Because Gen Z has more competition for jobs (and lower wages), they may feel like they need to borrow money just so they can afford basic necessities such as food and shelter until something better comes along even if this means taking on a high-interest rate loan from a private lender rather than getting help from their parents or government programs like food stamps or WIC (Women Infants Children) vouchers which would provide assistance without any interest attached

. Gen Z has also been raised by parents who were often financially unprepared for adulthood, which means that they don’t have the skills to handle their own money. This means that many of them are not only carrying debt but also earning less than their older coworkers–and this gap is expected to widen over time as Gen Z enters the workforce.

Gen Z has been hit with a lot of financial problems and needs to start working on their money management skills quickly.

Gen Z has been hit with a lot of financial problems and needs to start working on their money management skills quickly.

Gen Z is facing many financial challenges as they enter adulthood, including high student loan debt, low wages and high housing costs. According to CNBC’s article “A Generation Is Coming Of Age In A World Of Financial Turmoil,” Gen Z is expected to have $1 trillion in student loans by 2025 which is more than double the amount that Baby Boomers had at that age!

In addition, Gen Z workers are earning 20% less than millennials did at the same stage of life (25-34 years old), according to Forbes’ article “How Much Money Do Gen Xers Make Compared To Millennials And Baby Boomers?” This means that many members from this generation will struggle financially even more than previous generations because they aren’t making enough money from work or investments yet again due largely due those factors listed above such as high housing costs (rent), low wages/salaries and high student loan debt loads – not forgetting about inflation rates too!


We hope that this article has helped you understand why Gen Z is carrying more debt than previous generations. If you are a member of this generation, we urge you to start learning about money management now so that when it comes time for college or retirement, your finances will be in good shape.

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Hello, my name is Musa, and I am a writer specialising in business accounting and news. With over 10 years of experience in the industry, I have established myself as a knowledgeable and reliable source of information in the field.

I graduated from the University of Toronto with a degree in Accounting and finance and went on to work in various accounting firms, where I gained valuable experience in financial analysis, auditing, and taxation. However, I soon realised that my true passion lay in writing about the world of business.

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