Does Gen Z Handle Debt Better Than Millennials?


Gen X, a.k.a. many parents of Gen Zers and even millennials, has more debt than any other generation, according to Experian. But both millennials and Gen Z have seen their debt increase more than other generations since 2019.

So, whether you want to dunk on people who put way too much stock on what Hogwarts House they belong to or you stan Hufflepuff, you can probably benefit from developing a debt repayment plan. Maybe there’s even a Buzzfeed quiz to help you decide if the debt snowball method is right for you, or a TikTok that explains the benefits of the debt avalanche method.

But who’s better off in terms of how they handle debt? Let’s take a look.

Gen Z vs. Millennials state of credit

According to a TransUnion report, in the U.S., the most popular form of credit among “credit-active” Gen Zers is credit cards (41%), while the most popular form of credit among “credit-active” millennials is student loans (44%). And they’re roughly flip-flopped with 37% of Gen Zers holding student loans and 34% of millennials carrying credit cards.

Student loan debt is inherently going to be higher than credit card debt because of credit limits and the costs of college. Millennials notably have more outstanding student loan debt than any other generation. But Gen Z is catching up with borrowers 24 and younger owing an average of $16,500 in student loan debt, according to

Debt growth during COVID-19

Millennials have significantly more debt than Gen Zers do. But millennials also have had more time to put themselves in debt. The youngest Gen Zers aren’t even out of elementary school yet. They haven’t hit puberty let alone opened a credit card or taken out a personal loan.

Total personal debt in the U.S. grew from $14.08 trillion in 2019 to $14.88 trillion in 2020, a change of 6%, according to Experian consumer debt data. And the youngest generations contributed the most to that growth. Millennials saw an 11.5% increase in their debt from 2019 to 2020, going from an average of $78,396 to $87,448. But Gen Z’s debt—among those ages 18-23—increased even more significantly, from an average of $9,593 to $16,043, a 67.2% increase over the same time span.

As each generation gets older, it stands to reason that the percentage of debt growth for Gen Z will continue to go up before it goes down, especially as more Gen Zers start buying homes and going to college.

Generation X had the most debt of any generation with an average of $140,643 in 2020 compared with $135,841 in 2019, a change of 3.5% year over year. More than 69% of Gen Xers are homeowners, according to a recent Apartment List homeownership report.

Homeownership among millennials has accelerated significantly amid these times as they’ve tried to take advantage of lower interest rates, creating a serious supply and demand issue. The millennial homeownership rate is up to nearly 48%, according to Apartment List’s report—an increase of almost 8% from three years ago.

There’s “good” debt and “bad” debt, and entering the job market during the Great Recession in 2008 has probably affected how millennials handle their debt. While they might have more overall debt than Gen Z, millennials have leaned toward “good” debt like student loans and mortgages, and seem to be more conservative with their finances than you might think. And you thought they were a bunch of socialists.

It’s a fairly even match that doesn’t have a clear winner. But given millennials’ type of debt compared with Gen Zers, they’ve got a slight edge. Though there’s an argument for Gen Z—like how Nancy Kerrigan totally should’ve won the gold medal at Lillehammer long before Gen Zers were born.



Apartment List


By Casey Musarra

Casey is a reformed sports journalist tackling a new game of financial services writing. Previous bylines include Newsday and Mike Francesa once called her a “great girl.”

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