Millennials rely on credit cards at record rate during 2024 holiday season: study
Millennials are relying on their credit cards more than ever as they face their most financially challenging holiday season yet, according to new data.
Since 2020, millennials have used credit cards for the majority of their holiday spending – between 70% to 80% – and the percentage has been climbing, according to a three-year analysis of 2,000 American millennials.
Credit card use made up a whopping 88% of millennials’ Black Friday spending this year – up from 79% in 2023 and 72% in 2020, according to data from Piere, a personal finance app.
Meanwhile, credit card debt in the US jumped $24 billion to a record $1.17 trillion in the third quarter of 2024 – 8.1% higher than a year ago, according to a report from the Federal Reserve Bank of New York.
Gen Yers – or those born between 1981 and 1996, also known as millennials – are leaning on credit cards at record rates as they struggle to stuff stockings and splurge on gifts amid a cost-of-living crisis.
Piere forecasts this holiday season will be the worst yet for credit card debt thanks to stubborn pandemic-era inflation that sent prices on everyday goods sky-high.
The price tag on a dozen eggs, for example, jumped 163% since 2019, according to a CBS News analysis of government data. While a half-gallon of ice cream cost Americans $4.94 in 2019, the same sweet treat costs $6.30 today, the analysis found.
Millennials, in particular, are penny-pinching amid hefty price tags and interest rates that are slow to come down. More than half of millennials in the US reported feeling anxious about finances during the 2024 holiday season — and only 59% said they feel confident they can afford all the expenses tied to Christmas this year, according to Piere.
“We’ve all heard the overdone ‘avocado toast’ critiques aimed at millennials, but the truth is they’ve faced challenges that older generations didn’t,” Yuval Shuminer, CEO and co-founder of Piere, told The Post. “Record-high housing costs and a general housing shortage are obvious challenges, while large amounts of student debt can make saving money difficult.”
Shuminer traced the millennial struggle back to the Great Recession in 2008, when many Gen Yers started their careers – and entered the workforce with less financial stability than their parents had, making it more difficult to build wealth.
The market crash cost millennials an estimated $22,000 each on average, according to a 2014 report from the Young Invincibles, a nonprofit formed by young adults in 2009 to advocate for affordable health care.
Most millennials are not going into debt to splurge on luxuries – but rather, to keep up with everyday costs, Shuminer said.
“When prices for everyday essentials – like groceries, gas, or rent – climb, millennials are forced to spend more on basic essentials,” Shuminer told The Post. “But if wages aren’t increasing at the same rate, that extra money has to come from somewhere, often leading to increased reliance on credit cards or loans to make ends meet.”
Some 54% of millennials said the rising cost of living crisis will impact their spending this year, Piere said.