Baby boomers slash their debt by 45.3% amid growing economic uncertainty, outpacing all other generations as Americans struggle with sky-high interest rates and inflationary pressures under Biden’s policies.
Key Takeaways
- The median non-mortgage debt in the 100 largest U.S. metros decreased by 23.9% to $18,762 from previous $24,668, indicating Americans’ efforts to reduce debt burdens.
- Gen X carries the highest median debt at $26,207, while baby boomers maintain the lowest levels at $10,272 and achieved the most significant debt reduction of 45.3%.
- Credit card debt remains widespread across generations, with usage ranging from 70.2% among Gen Z to 92.6% among baby boomers, despite high APRs offering little relief.
- Student loan debt is declining overall (16.8% decrease) due to federal loan cancellations, while mortgage debt remains the largest component of consumer obligation.
- Total U.S. consumer debt reached $17.57 trillion in Q3 2024, increasing 2.4% from 2023, though at a slower pace than previous years.
Generational Debt Disparities Reveal Financial Priorities
Recent data from LendingTree’s comprehensive study reveals striking generational differences in how Americans are handling their financial obligations. Gen X bears the heaviest burden with a median non-mortgage debt of $26,207, followed closely by millennials at $24,810. These middle generations are struggling with multiple financial responsibilities simultaneously, including housing costs, family expenses, and lingering student loans. The situation is particularly dire in certain metropolitan areas, with Gen Xers in El Paso, Texas, carrying a staggering $40,709 in median non-mortgage debt – the highest for any generation in any metro area.
In contrast, baby boomers have demonstrated remarkable financial discipline, reducing their debt levels by an impressive 45.3% – significantly outpacing other generations who managed reductions of only 18% to 23%. This dramatic decrease has positioned boomers with the lowest overall non-mortgage debt at $10,272. Their focus on debt reduction reflects both retirement planning priorities and heightened concerns about economic stability under the current administration’s policies that have fueled inflation and interest rate hikes, making debt particularly burdensome.
“Americans in 100 of the largest metros now have a median non-mortgage debt of $18,762 across four generations—baby boomers, Gen X, millennials, and Gen Z—which is down 23.9 percent compared to $24,668 last year, financial services company LendingTree said in a June 24 report,” said LendingTree.
Credit Card and Auto Loan Debt Trends Expose Economic Pressures
Credit card debt continues to plague Americans across all age brackets, with prevalence ranging from 70.2% among Gen Z to an overwhelming 92.6% among baby boomers. Despite their overall lower debt levels, baby boomers show the highest credit card usage rates, indicating potential reliance on credit to supplement fixed incomes during inflationary periods. Gen Xers in Bridgeport, Connecticut, carry the highest median credit card balances at $8,656, demonstrating the regional disparities in financial pressure that exist across the country.
“I think it’s a further sign that people are being cautious and looking to firm up their financial foundation amid all the economic uncertainty we’re facing today. They’re trying to focus on paying down high-interest debt and building their emergency fund. With that in mind, they may choose to put off bigger-ticket purchases such as cars and kitchen appliances,” said Matt Schulz.
Auto loan debt reveals another dimension of financial strain, with 51.5% of Gen Xers carrying auto loans with a median balance of $23,350. This significant burden reflects both necessity and the steep cost of transportation in America. While overall auto loan debt increased by only 1.5% nationally, high monthly payments remain a serious concern for working families. The combination of elevated car prices and persistent interest rates has made vehicle ownership increasingly challenging for many middle-class Americans struggling to maintain financial stability.
Student Loan Burden and Uncertain Economic Outlook
The data reveals intriguing patterns in student loan debt across generations. While Gen Z is most likely to have student loan obligations, reflecting their recent education completion, Gen X surprisingly carries the highest median student loan balance at $33,988. This counterintuitive finding highlights the long-term impact of educational debt, with many Gen Xers still paying for degrees obtained decades ago or financing their children’s education. Overall, student loan debt decreased by 16.8% nationally due to controversial federal loan cancellations, though this relief has been unevenly distributed.
“Overall debt levels remain elevated and delinquency continues to rise, albeit at a slower pace. However, consumers seem to remain well-positioned,” said Josee Farmer.
Looking ahead, the outlook for consumer borrowing in 2025 remains uncertain as the Trump administration inherits an economy marked by persistent inflation, elevated interest rates, and considerable consumer debt burdens. Total U.S. consumer debt reached $17.57 trillion in Q3 2024, marking a 2.4% increase from 2023, though this growth has slowed compared to previous years. With mortgage debt increasing by 4.2%, HELOC balances surging 9.7%, and credit card debt up 8.6%, Americans are demonstrating increased caution by reducing non-mortgage debt where possible while navigating a challenging economic landscape.
