How much does each generation owe?
Among those with credit card debt, here’s how much each age group is carrying and how much they’re contributing each month to pay it down on average, according to New York Life:
- Gen Z owe $5,337 and are contributing $217 each month.
- Millennials owe $7,280 and are contributing $393 each month.
- Gen X owe $9,254 and are contributing $312 each month.
- Baby boomers owe $8,288 and are contributing $388 each month.
Although each generation is dealing with a pretty hefty debt load, Gen X's credit card debt is outpacing the rest — it’s almost $1,000 more than what boomers owe on average. What’s more, Gen X is paying just $312 a month on their balances, significantly less than what millennials and boomers are contributing toward paying off their debts.
But there’s an explanation for why this particular age group is racking up more credit card debt. Gen X is more likely to juggle multiple financial obligations, such as paying off their mortgages, caring for their children and even supporting their elderly parents.
On the other hand, many baby boomers are settling into their golden years and no longer need to financially support their adult children, and they’ve likely paid off their home loans as well. Some millennials are opting to go child-free, which frees up more time to earn and fewer expenses to pay off, while many are simply struggling to find a foothold in the real estate market.
Gen Z adults are either still in college or have just begun their careers — and many of them are either still living at home with their parents or getting help with their expenses too.
Plus, since Gen X is in their higher-earning years, they’re more likely to get approved for more credit — and potentially end up with bigger balances as a result.
How to pay off your credit card debt
No matter what generation you belong to, if you’re struggling with credit card payments, here are a few helpful tips to help you manage them:
First, try politely asking your credit card issuer for a lower interest rate to help you pay off your debt. You’re more likely to get approved if you’re a historically reliable borrower who pays their bills on time and has a strong credit score. You can also try and request a temporary reduction on your credit card’s interest rate, or inquire about any repayment assistance options that might be available to you.
Next, once it’s time to actually start paying off your debts, consider the avalanche technique, where you tackle your debt with the highest interest rate first and make minimum payments on the others to avoid accumulating as much interest. Once you’ve paid off your largest debt, you can work your way down to pay off the others.
If you’re struggling with the avalanche technique, there’s another debt-payment method you can try called the snowball technique. This involves paying off your smallest debts first while making minimum payments on the larger ones. Paying your debts this way can build confidence by providing a series of small victories, but can cost you more in interest payments in the long run.
Which method is the best way to pay off your debts? It depends on your personality, but both are ways for you to reach the same goal.
If you’re having trouble keeping track of all your bills, you could also consider rolling them all into one loan with a lower interest rate. Just keep in mind you typically need a credit score of at least 670 to qualify for debt consolidation.
