Credit Card Delinquency Rates Rise Near 10% for Young Americans in Q2

Young Americans aged 18-29 are facing increasing credit card delinquency rates, with nearly 10% of their balances becoming 90 or more days overdue in Q2. This rate has hovered around 10% since 2023 and is the highest since 2010. Experts are concerned about the trend, given Gen Z's already shaky financial situation, including high unemployment rates and increasing debt.

Young Americans aged 18-29 are facing increasing credit card delinquency rates, with nearly 10% of their balances becoming 90 or more days overdue in the second quarter of 2025. This rate has hovered around 10% since 2023 and is the highest since 2010 [1]. The New York Federal Reserve reported that credit card delinquency rates for Americans under 40 have been "unusually elevated," and the trend is being closely monitored [1].

The financial situation of Gen Z is already precarious, with high unemployment rates among recent college graduates. A separate report by the New York Fed found that the unemployment rate for recent college graduates aged 22-27 had spiked from post-pandemic lows and is 0.7% higher than the national rate as of June [1]. Additionally, members of Gen Z are increasingly using "buy now, pay later" (BNPL) services, which have accelerated in the last year after three years of slowing growth [1].

Despite the high delinquency rates, the total consumer credit rose $7.4 billion in June, with nonrevolving credit, typically auto and student loans, driving the increase [2]. Revolving credit, mainly credit cards, declined for the second straight month in June, but the overall trend remains mixed [2].

The financial challenges faced by young Americans are compounded by the potential loss of the Apple Card business for CoreCard, a lesser-known fintech company. Apple's decision to end its credit card partnership with Goldman Sachs and potential partnership with JPMorgan Chase puts CoreCard at risk of losing its biggest client [3]. Euronet Worldwide recently announced a $248M all-stock deal to acquire CoreCard, providing some security for the company's future [3].

In summary, young Americans are facing significant financial pressures, with high credit card delinquency rates and a precarious job market. The financial sector is also undergoing significant changes, with potential shifts in partnerships and services. These trends highlight the need for continued monitoring and support for Gen Z's financial health.

References:
[1] https://www.foxbusiness.com/economy/young-americans-drowning-credit-card-debt-delinquency-rates-climb-near-10-q2
[2] https://www.marketwatch.com/story/credit-card-debt-declines-for-second-straight-month-in-june-b1fc6427
[3] https://theoutpost.ai/news-story/match-group-s-q2-results-ai-push-and-gen-z-focus-amidst-dating-app-challenges-18731/