It is not a surprise that Generation-Z, the population group born after 1992, has the lowest Vantage Score, averaged at 634, versus the Silent Generation (born before 1946), who could be their grandparents which carries a 729 average. The CARD Act, which curtailed college credit card lending has much to do with the low starting point.
Experian’s annual report on credit scores provides a deep dive into their massive data files.
On average, Americans’ credit card debt jumped 2.7% during the past year — from $6,188 to $6,354.
Some demographics saw much sharper rises, however. Gen X’rs balances are up 5.1%, from $7,372 to $7,750. Millennials’ plastic debt climbed fully 10.8% from $3,894 to $4,315. On the other hand, card debt among the Boomers and the Silents stayed almost flat.
According to the Consumer Financial Protection Bureau, “consumers opened around 110 million new credit card accounts in 2016, which is roughly 50% higher than 2010 and a higher total than in any single year since 2007.”
However, the bridge between Gen-Z and their parents (or grandparents) continue:
Americans over 60 are the fastest-growing segment of student loan borrowers, according to the Consumer Financial Protection Bureau. From 2005 to 2015, their average debt load doubled, from $12,100 to $23,500.
The shift to higher debt by older Americans is not particularly healthy; the best place for the industry to see growth is in the front end which Gen-Z, not the back-end, where the only thing holding off retirement might be paying off debt.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
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