Credit Card Spending Growth Among Younger Generations
During the third quarter, Synchrony Financial reported that Gen Z and millennial customers experienced the highest growth in credit card spending. This surge comes as rising living costs and increased borrowing expenses have put pressure on household finances.
The company’s purchase volume rose by 8% to reach $49.7 billion, with younger consumers leading the way. This uptick in spending occurred alongside growing affordability challenges. Research from the Federal Reserve indicated that nearly half of Americans under 30 received financial help with their expenses in 2025.
Brian Doubles, CEO of Synchrony, mentioned that spending levels increased across various generations and credit categories, with the most rapid rise seen among younger customers. The company noted significant double-digit growth in spending outside its retail partners on both essential and discretionary items, such as gasoline, electronics, and discount stores.
The increase in prices also played a role in the uptick. Synchrony noted that part of its 9% increase in purchase volume within its Home & Auto division and 13% growth in its Diversified & Value division was linked to rising gasoline prices, highlighting how consumers might spend more without necessarily buying more products.
The financial challenges for younger Americans extend beyond just credit cards. A survey from the Federal Reserve released in May found that 47% of adults aged 18 to 29 received external financial help to manage their expenses in 2025. This assistance covered areas like housing, utilities, transportation, and daily necessities.
Additionally, the same research indicated that 49% of adults under 30 were living with a parent, representing a 12 percentage point increase since 2019. Nearly 25% of Americans aged 18 to 29 reported being unable to pay all their bills in full during the month prior to the survey.
Housing affordability is compounding these difficulties. Home prices have surged by 54% nationally since 2020, according to the Joint Center for Housing Studies from Harvard University. Furthermore, almost half of renter households are spending more than 30% of their income on housing based on the latest figures.
The strain grew worse in September when consumer prices climbed by 3.7% compared to the previous year, while inflation-adjusted average hourly earnings saw a decline of 0.7%, as reported by the Bureau of Labor Statistics.
Federal Reserve data also indicated an expanding gap between Americans who feel financially secure and those who are struggling. Average credit card balances for respondents facing financial challenges increased by 37%, or about $2,530, between 2023 and 2025, whereas balances for those who felt financially comfortable saw only a 1% increase, about $59.
Managing that debt is costly. In August, the average interest rate on credit card accounts that accrued interest hit 22.36%, according to Federal Reserve data. The Fed’s household survey revealed that 46% of credit card holders aged 18 to 29 held a balance at least once during 2025.
Synchrony noted that its outstanding loans grew by 3% to $103.3 billion in the third quarter. Encouragingly, the delinquency rates showed improvement; loans that were at least 30 days overdue decreased to 4.34%, down from 4.39% the previous year, while loans overdue by at least 90 days fell to 2.06%, down from 2.12%.
