NextFin news, Generation Z in the United States is confronting a significant debt challenge as of Saturday, September 20, 2025, with credit card delinquency rates among 18-to-29-year-olds surpassing 10%, the highest among all age groups. This financial strain is largely attributed to rising costs driven by tariffs imposed during the Trump administration, which many young consumers blame for their increasing credit card balances.
A recent Investopedia report highlights that 56% of Gen Z respondents believe tariffs have contributed to their credit card debt, compared to 47% of the general American population. The tariffs have led to higher prices on essential goods such as food, clothing, and electronics, pushing many young adults to rely more heavily on credit cards to cover basic expenses.
Credit card data from TransUnion indicates that Gen Z is more credit-active than Millennials were at the same age, with 84% of credit-active Gen Z consumers aged 18-24 holding at least one credit card. The average credit card debt for consumers aged 22 to 24 has risen to $2,834, up from an inflation-adjusted $2,248 in 2013. Furthermore, delinquency rates for Gen Z borrowers are nearly 10% higher than those for Millennials within the first two years of account opening.
The Yale Budget Lab's analysis shows that the average effective U.S. tariff rate has surged to 17.5%, the highest since 1935, potentially costing the average American household over $2,300 annually if current policies persist. This economic pressure has led many young consumers to adopt cost-saving measures such as purchasing secondhand goods, shopping at warehouse clubs, and utilizing balance transfer options to manage their debt.
Despite these efforts, the high average credit card annual percentage rates (APRs) of around 22% and stagnant median wages for new hires limit Gen Z's ability to reduce their debt burdens effectively. The Supreme Court is scheduled to hear arguments in early November 2025 regarding the legality of the tariffs, with lower courts having ruled that the Trump administration exceeded its authority. A ruling against the tariffs could result in substantial refunds to consumers.
In summary, Gen Z's increasing reliance on credit cards amid tariff-driven inflation has led to elevated debt levels and delinquency rates, signaling a potential financial crisis for many young Americans unless economic conditions improve or wage growth accelerates.
Sources: Investopedia (September 19, 2025), TransUnion, Yale Budget Lab, Harvard Kennedy School, CNBC, U.S. Bureau of Labor Statistics, CNN.
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