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Generation Z may soon face a crisis of debt woes, with a new survey showing that more than half (56%) of Gen-Z respondents (compared with 47% of all Americans) believe the Trump tariffs are contributing to their struggles with mounting credit card bills.
For many young adults, this isn’t a matter of overspending—it’s about the rising cost of basics like food, clothing, and electronics, much of which is being pushed higher by tariffs.
Why Tariffs Could Be Increasing Personal Debt
With credit card delinquency rates among 18-to-29-year-olds over 10% and average card balances nearing $6,500, younger Americans are not wrong to think tariffs might be adding to their credit card bills. U.S. consumers are on the front lines of the trade wars, paying higher prices for both imported goods and those made domestically that rely on imported parts and ingredients.
A Yale Budget Lab analysis released earlier this month shows that the average effective U.S. tariff rate has surged to 17.5% (the highest since 1935). The analysis estimated that the Trump tariffs will cost the average American household $2,300 in 2025 if current policies remain in place.
Perhaps that’s why a Harvard Youth Poll of 18-to-29-year-olds indicated that less than a fifth (19%) are in favor of the new tariffs, while half of Gen Z say they are “strongly opposed.” Meanwhile, other surveys, including CNBC’s All-American Economic Survey, report that over half of Americans have grown pessimistic about both current and future conditions for the U.S. economy, while 60% report that their family’s income is not keeping up with the cost of living.
Gen Z’s Credit Cards Are Maxing Out
Credit card data from TransUnion confirms that Gen Z is more credit-active today than Millennials were 10 years prior. In the fourth quarter of 2023, 84% of credit-active Gen Z consumers ages 18-24 had at least one credit card, compared with 61% of Millennial consumers. The average credit card debt for consumers aged 22 to 24 has also increased to $2,834, up from an inflation-adjusted $2,248 in 2013.
Younger people are having problems paying down that debt. TransUnion reports that in the first two years after opening accounts, almost 10% more Gen Z borrowers fell 60-plus days past due on credit cards, auto loans, and personal loans compared with Millennials at the same stage. While overall U.S. credit card delinquency rates eased slightly in 2025, Gen Z remains the group most likely to miss payments.
What Young Consumers Can Do About It
The data suggests that Gen Z is shifting how they spend. For instance, a 2025 industry analysis reported that 68% of Gen Zers are already buying secondhand goods. That’s likely to increase even further as tariffs continue to add to the price tag of new merchandise. Other options young consumers are turning to include warehouse clubs and discount chains to save on groceries and fast-fashion resale services like thredUP and The RealReal to unload new items.
Experts suggest consumers try to pay down credit cards and switch to more affordable options, especially if a low-APR balance transfer can be secured. Debt consolidation loans and other high-interest rate reduction options should also be considered before tackling less immediate financial goals.
However, with average credit card APRs around 22% and median wages for new hires struggling to keep up with costs, many young adults don’t have the financial flexibility to escape their debt traps by moving debt to lower-cost credit or making additional payments.
Tip
The Supreme Court will hear arguments in the first week of November on whether Trump’s tariffs are legal, with lower courts already ruling he exceeded his presidential authority. If the court upholds those rulings, the government could be forced to refund between $750 billion and $1 trillion in collected tariffs.
The Bottom Line
Gen Z’s embrace of credit cards has come with a costly trade-off: higher balances and more missed payments. Now, younger adults are also facing higher everyday costs driven by tariffs. With balances nearing $6,500 and delinquency rates exceeding 10%, younger borrowers are entering adulthood financially strained.
Unless tariff pressures ease or wages catch up, many Gen Z households may find themselves in a debt trap that feels less like a rite of passage and more like a financial crisis.
