It’s clear that the coronavirus pandemic had a huge economical impact, no matter the social category, but it appears that one specific generation racked the most credit card debt over the past year.
According to a report from CreditCards.com, 56% of millennials revealed that their overall credit card debt has grown since the very first weeks of the pandemic, making them the leading category in this cop, when compared with older generations.
Is the crisis the only one to blame?
Over half of the millennials who participated in the study – 2,457 adults – claim that the coronavirus crisis was the one that led to their so-called snowballing balances, while Gen Xers, as well as Baby Boomers, point to the pandemic itself as the main cause of their growing debt.
As a side note, 53% of Generation Xers and 46% of Baby Boomers found themselves in the same situation, registering increased credit card debt.
The reasons behind increased credit card spending
Surprisingly or not, poor spending decisions isn’t the main reason that led to such credit card debt among millennials. In fact, stems from the pandemic’s bigger impact on millennials, when compared with older generations, seems to be the main cause, says CreditCards.com industry analyst Ted Rossman.
Millennials appear to have suffered a double-whammy, as a big part of the generation was trailing in wealth creation in the years before the coronavirus pandemic. Specifically, around 6 out of 10 said they or one of their household members lost income last year, ever since the start of the crisis. In contrast, 5 in 10 people aged between 55 and 64 lost income during the same period.
“It really comes back to those two big factors: millennials are the most likely to have had their income compromised and least likely to have adequate emergency savings,” Ted Rossman added.