Gen Z adults are leaning more on their cards. A Deloitte and ConsumerSignals survey shows the share of Gen Z who carry a balance from one billing cycle to the next climbed more than 19% between Q3 2023 and Q2 2026.
In the survey, Gen Z means adults ages 18 to 29. While the portion of Gen Z carrying balances increased, every other generation moved the other way. Baby boomers saw the biggest shift, with the share carrying balances falling nearly 26% over the same stretch.
This survey asked 1,000 U.S. adults every month from July 2022 through June 2026. Each monthly read has a margin of error of ±3 percentage points.
Credit cards are "one of the most expensive ways to borrow," says Eileen Olson, a certified financial planner who founded Emerald Wealth. According to the latest Federal Reserve data, average credit card interest rates were around 21% in August.
At those rates, Olson says, "balances grow fast, and minimum payments can stretch a small balance across years." Because interest accrues on top of what you already owe, the total can swell, making it harder to save for emergencies or invest.
Olson, who uses behavioral finance with clients, points to a marketplace "designed to sell us things." Tapping a card often does not feel like spending, which makes it easy to let costs pile up and put off thinking about the bill. As a parent of a Gen Z daughter, she describes many in this cohort as "generous, creative and full of plans," which can still nudge spending higher.
Budgets are also tight. Many Gen Z adults are early in their careers and not at peak earnings, while prices for basics like housing and groceries remain elevated. On top of that, many younger people are making monthly student loan payments. Recurring discretionary charges such as streaming subscriptions, paired with impulse buys, can leave little room between pay and outflows, Olson says.
"Without a plan, we end up living in reaction instead of with intention," she says. In that cycle, "every surprise [expense] lands on a card, and you're stuck in survival mode."
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Olson recommends building an emergency cushion so a flat tire or medical bill does not derail your budget. If covering the basics is already hard, she suggests reassessing priorities and checking that spending lines up with what matters most. "If you're saving for a house but eating out every day on autopilot, those two goals are pulling against each other," she says.
After a rainy-day fund is in place, Olson focuses on balancing debt payoff with saving for the future. Generally, she says the math points to paying down high-interest balances first. Every dollar you put toward a high-rate card acts like earning the same return on an investment, since it is interest you no longer pay.
That yardstick matters. Charles Schwab Asset Management data show the broad stock market returned about 10% annualized from 1926 through 2025. That long-run return sits below the typical APR above 20 percent on carried credit card debt. When a card charges near 21%, the cost of waiting can outpace what your investments might earn in the same period.
A quick example from Bankrate's credit card payoff calculator shows how much the payment itself matters. On a $5,000 balance at 21%, paying $256 per month for two years adds up to $6,166 repaid. Increase the monthly payment to $350, and you shorten the payoff by seven months while cutting interest charges by $362.
Olson is clear: while investing can build wealth, curbing high-interest card debt usually comes first because the savings from avoided interest are certain. "Paying off a 20% card is a guaranteed 20% return," she says. She makes one key exception.
Even with debt, contribute enough to a workplace plan to capture the full employer match. "That's free money," she says. She adds that the match effectively doubles each dollar you contribute up to the match, and once the debt is gone, redirect those card payments to retirement.
Credit card rates near 21% in August make revolving balances a costly drag on your money. The survey trend shows more Gen Z adults are feeling that weight, even as older cohorts see progress. If debt is compounding, the dollars you send to interest are dollars not building an emergency fund or buying into long-term growth.
The bottom line: high-rate balances can quietly out-earn your investments in the worst way. The more you can prevent new charges, build a cushion to handle surprises, and prioritize expensive debt, the faster your cash flow can support the goals you care about next.
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