Fact Checked

Gen Z drives significant growth in credit market

Written by: Paris Ward
• •2 min read
College student sitting in a cafe, looking at her laptop and holding a credit cardImage: College student sitting in a cafe, looking at her laptop and holding a credit card
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More members of Gen Z — which includes 18- to 24-year-olds — have jumped into the consumer credit market, according to the latest TransUnion Industry Insights report.

According to the report, during the second quarter of 2019, about 14 million Gen Z consumers had credit card debt, an auto loan, a personal loan or a mortgage — up from 11 million in the second quarter of 2018. This nearly 44% rise was driven by demand across all types of loans.

Want to know more?

Why is Gen Z taking on more debt?

Members of Gen Z are people born in 1995 and after. This means the oldest members of the generation are turning 24 this year — an age when many young adults are entering the workforce and may need credit. They may also be looking to make large purchases like a new car or home.

How could this impact the economy?

More people entering the workforce is generally a good thing for the economy, because it means they’ll have more money to buy goods and services. According to the TransUnion report, another 13 million Gen Z consumers are expected to become credit eligible over the next three years.

What can you do to keep your debt in check?

If you’re a member of Gen Z entering the credit market, you may be wondering how to keep your debt under control. We have some tips.

  • It all begins with a budget. Think about how much money you have coming in and going out every month. To keep it simple, you could start with something like the 50-30-20 rule, where you spend 50% of your monthly income on bills and other necessities, 30% on fun, and the other 20% on savings and paying down debt.
  • Build your credit wisely. If you’re newer to the credit market, your borrowing options may feel limited. But there are some ways you can work to build credit, like having a parent co-sign a loan, or applying for a secured credit card.
  • Have a solid debt-repayment plan. This might mean paying down your highest-balance debt first, or it could mean paying off your highest-interest debt first. Either way, having a plan to tackle your debt and sticking with it can help you reach your financial goals.
About the author: Paris Ward is a content strategist at Credit Karma, providing readers with the latest news that will aid their financial progress. She has more than a decade of experience as a writer and editor and holds a bachelor’s… Read more.