Millennials are relying on credit cards more than ever as they head into the most economically challenging holiday season ever, new data shows.
Millennials are using credit cards for the majority of their holiday spending (70% to 80%) and increasing since 2020, according to a three-year analysis of 2,000 American Millennials There is a trend.
Credit cards accounted for a whopping 88% of Millennials' Black Friday spending this year, up from 79% in 2023 and 72% in 2020, according to data from personal finance app Pierre.
Meanwhile, U.S. credit card debt increased by $24 billion in the third quarter of 2024 to a record $1.17 trillion, an 8.1% increase year-over-year, the report said. Report from the Federal Reserve Bank of New York.
Generation Y (people born between 1981 and 1996, also known as Millennials) are struggling to stuff stockings and splurge on gifts amid the cost-of-living crisis, and are turning to credit cards in record time. I rely on it.
Pierre Credit card debt is expected to be at an all-time high this holiday season, as stubborn pandemic-era inflation has sent the prices of everyday goods soaring.
For example, the price of 12 eggs has increased by 163% since 2019, according to one study. CBS News Analysis of government data. In 2019, Americans paid $4.94 for a half-gallon of ice cream, while the same sweet treat now costs $6.30, according to the analysis.
Millennials, in particular, are struggling to get even a penny, especially with high price tags and slow interest rates coming down. According to Pierre, more than half of U.S. millennials report feeling anxious about their finances for the 2024 holiday season, and more than half of them say they are confident they will be able to cover all of their Christmas expenses this year. was only 59%.
“We've all heard the over-the-top 'avocado toast' criticism aimed at millennials, but the truth is they face challenges that older generations did not.” Yuval Schminer, Pierre's co-founder and CEO, told the Post. “Record high housing costs and a general housing shortage are obvious challenges, but high student debt can make it difficult to save.”
Schminer traced the struggles of millennials to the Great Recession of 2008. At the time, many Gen Y's started their careers, but they entered the workforce with less financial security than their parents, making it more difficult for them to build wealth.
One study found that the market crash cost millennials an estimated $22,000 on average. 2014 Report from Young Invinciblesis a nonprofit organization founded by young people in 2009 to advocate for affordable health care.
Schmeiner said most millennials don't borrow money to buy luxury goods, but rather to cover everyday living expenses.
“As prices for necessities like food, gas and rent rise, millennials are forced to spend more on basic necessities,” Schminer told the Post. “But if wages don't increase at the same rate, that extra money has to come from somewhere, often leading to increased reliance on credit cards and loans to make ends meet. .”
About 54% of millennials said the rising cost of living crisis will affect their spending this year, Pierre said.
