It’s the Holiday Season, and we all know what that means —
Holiday Spending
If you feel pressured to overspend during the Holidays, you’re not alone. However, some generations are more prone to systemic overspending than others.
According to the Federal Reserve Bank of New York, the aggregate use of credit cards stands at about 23% across the United States. But this number varies wildly from person to person.
More than half (52%) of credit card holders were using less than 20% of their allotted credit. However, 18% were spending more than 90% – a rate high enough that the Federal Reserve dubs them “maxed-out”.
The chart below uses data from the Federal Reserve Bank of New York and shows the proportion of each generation (from Gen Z to Baby Boomer) that carry maxed-out credit cards as of Q1 2024. The chart also includes the median limit and median balance as of the same date.
The Federal Reserve defines “Credit Utilization” as the proportion of the borrower’s aggregate credit limit used – and when more than 90% is used, the Fed terms them “maxed-out borrowers”.
One important thing to note is that Gen Z has a considerably lower credit limit than other generations, and cards with lower limits generally have higher utilization rates.
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Happy Holidays!