Rising Debt Levels for Millennials in their 30s: A Look into the Causes and Impact

Millennials in their 30s are accruing debt faster than their peers and it is having a major impact on their finances. According to The Journal's analysis, people who are 30 to 39 years old currently owe an estimated $3.8 trillion in debt, and the last time debt owed by 30-somethings grew this quickly was between 2005 and 2008. This debt is being driven in part by higher costs of essentials like groceries, gas, and childcare, as well as rising interest rates on credit cards.

US household debt is at an all-time high and credit card debt has jumped more than 11 percent in the last year, with the average balance rising to $5,805.[0] If the Federal Reserve announces a half-point increase in its benchmark interest rate at the March meeting, those APRs will climb even higher, costing credit card borrowers an extra $3.4 billion in interest charges over the next 12 months.[1]

Stephanie Roth, a 41-year-old administrative medical assistant, understands this financial squeeze first-hand.[2] During the pandemic, she went through a divorce, and she found herself leaning on her credit card to pick up the extra expenses her paycheck couldn't cover.[3] Her balances started to grow, and at the same time, her credit card company was raising interest rates.[4]

The fraught nature of homeownership for millennials is also a factor, with mortgage rates close to 7 percent.[5] This, combined with high prices, is leading to higher amounts of credit card debt.

Though Americans across the income stream saved a lot of money in 2020, this money has quickly been spent and, in many cases, replaced with debt.[4] Stephanie Roth is focused on making sure her children still have fun and memorable moments, but the reality is that with prices rising, getting ahead of the debt is becoming increasingly difficult.

0. “US Consumers Are Getting Crushed by High-interest Debt and Inflation” Gold Seek, 9 Mar. 2023, https://goldseek.com/article/us-consumers-are-getting-crushed-high-interest-debt-and-inflation

1. “Credit card debt is at an all-time high, putting households near ‘breaking point,' study shows” CNBC, 9 Mar. 2023, https://www.cnbc.com/2023/03/09/as-credit-card-debt-hits-new-high-households-near-a-breaking-point.html

2. “How we went from near record savings to record debt in just two years” MPR News, 8 Mar. 2023, https://www.mprnews.org/story/2023/03/08/npr-how-we-went-from-near-record-savings-to-record-debt-in-just-two-years

3. “Many Americans have exhausted their savings as credit card debt hits a record high” WUSF Public Media, 7 Mar. 2023, https://wusfnews.wusf.usf.edu/2023-03-07/many-americans-have-exhausted-their-savings-as-credit-card-debt-hits-a-record-high

4. “Credit Card Nation: How we went from record savings to record debt in just two years” Jefferson Public Radio, 8 Mar. 2023, https://www.ijpr.org/npr-news/npr-news/2023-03-08/credit-card-nation-how-we-went-from-record-savings-to-record-debt-in-just-two-years

5. “Millennials in 30s struggling with debt, homeownership amid tough economy” Business Insider, 8 Mar. 2023, https://www.businessinsider.com/millennials-parents-debt-jobs-wages-homeownership-social-security-retirement-economy-2023-3

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