Almost 10% of young Americans are behind on their credit card payments, according to a report.

Young Americans Face Rising Credit Card Delinquency

Micah Smith, president and founder of Micah Abigail LLC, discusses the implications of Fox News Digital and data on Buy Now, Pay Later loans.

According to a report from the New York Federal Reserve, young Americans made up the largest group experiencing credit card delinquency in the second quarter. Interestingly, there was a small decrease compared to the previous quarter, yet the data revealed that nearly 10% of credit card balances for those aged 18-29 had been overdue for more than 90 days.

Researchers at the New York Fed noted that credit card delinquency rates for individuals under 40 are “unusually rising,” indicating they are paying close attention to this trend. It’s worth mentioning that the serious delinquency percentage for the 18-29 age group has remained around 10% since early 2023, a rate not seen since 2010.

American Credit and Household Debt Reach New Heights

This report highlights growing financial instability among Gen Z, with another New York Fed report showing that unemployment rates for recent college graduates aged 22-27 have surged, now 0.7% above the national average as of June. Additionally, excluding the pandemic era, the unemployment rate for college graduates in March 2025 marked the highest level in over ten years.

Also noteworthy is that Gen Z members are finding it increasingly difficult to access both new and traditional credit services. A recent report from the Bank of America Institute indicates that usage of Buy Now, Pay Later services among this demographic accelerated last year after a period of slower growth.

Impact of Credit Card Interest Rate Caps

While most Buy Now, Pay Later lenders report payment activity to credit bureaus, New York Fed researchers found that younger borrowers are utilizing these services at significantly higher rates than their older counterparts. Affirm, for instance, has begun reporting payment histories to credit agencies like Experian and TransUnion.

The findings suggest that typical BNPL purchases range from $600 to $1,000, but interestingly, some reports indicate that this has even extended to smaller items, like coffee.