Millennials are increasingly leaning on credit cards to manage holiday spending as they face one of the most financially challenging seasons in recent years.
A new study from the personal finance app Piere reveals that credit card use among millennials has surged, reaching 88% of their Black Friday spending in 2024, the New York Post reported.
This marks a significant rise from 79% in 2023 and 72% in 2020, highlighting a growing dependence on credit to cover holiday expenses.
The trend reflects broader economic challenges faced by millennials — those born between 1981 and 1996 — amid persistent inflation and rising living costs. According to the Federal Reserve Bank of New York, credit card debt in the U.S. hit a record $1.17 trillion in the third quarter of 2024, representing an 8.1% increase compared to the previous year. This sharp uptick underscores how millennials are turning to borrowed money just to keep up with holiday demands.
Pandemic-era inflation continues to impact everyday essentials, further straining millennial budgets. For instance, the price of a dozen eggs has soared by 163% since 2019. Meanwhile, the cost of a half-gallon of ice cream rose from $4.94 in 2019 to $6.30 in 2024, according to government data analyzed by CBS News. These price hikes have made even routine purchases more expensive, forcing many to rely on credit for holiday shopping.
The financial anxiety felt by millennials is palpable. Over half of millennials reported feeling stressed about money during the 2024 holiday season, and only 59% expressed confidence in being able to afford Christmas-related expenses, Piere found, the Post reported. This sense of financial insecurity is driven by stagnant wages, high interest rates, and increased costs for goods and services. While the Federal Reserve has taken steps to manage inflation, interest rates remain elevated, making it harder for consumers to manage debt.
Compared to other generations, millennials are predicted to outspend both Gen X and Baby Boomers this holiday season. Despite their financial challenges, millennials are balancing their desire to celebrate with the reality of their strained budgets. This generation, now in their late 20s to early 40s, is navigating a difficult economic landscape where holiday spending often comes with long-term debt implications.
Experts caution that this reliance on credit cards can have lasting consequences. With interest rates on credit card balances hovering around 20% or higher, unpaid holiday debt can quickly snowball.