[Fox Business] Gen Z lean on credit more than millennials did and racking up more debt
The latest crop of young adults in the U.S. is leaning more on credit than the generation before, and experts expect the problem to get worse before it gets better as elevated inflation continues to rage.
A new report from TransUnion released Wednesday shows Gen Z adults, ages 22 to 24, are opening up more credit cards, racking up more debt, and have a higher rate of delinquencies than their millennial counterparts did at the same age range a decade ago.
The report, “Solving for Gen Z,” found 84% of credit-active consumers between 22 and 24 years old held one or more credit cards in 2023, compared to 61% in 2013.
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Gen Z’ers are also more likely to take out an auto loan than millennials were 10 years ago, at 30% versus 25%, respectively.
The report pointed to the 32% cumulative rise in the consumer price index (CPI) over the past decade while noting that debt levels across all age groups are up, with credit card debt among Americans topping $1 trillion last year.
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TransUnion said the high prices and high credit card balances are contributing to Gen Z consumers holding higher balances on other credit products, including auto loans, which are up 14% for that generation compared to inflation-adjusted numbers from 10 years prior.
“It’s no surprise that in this economic climate, one in which the cost of living is significantly higher relative to a decade ago, younger consumers are increasingly turning to credit products to bridge their financial needs,” Jason Laky, executive vice president and head of financial services at TransUnion, said in a statement.
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“This is a demographic that is younger and newer to the workforce and accordingly, is likely commanding a lower salary at an earlier point in their career,” Laky added. “As long as inflation remains elevated and the cost of goods remains so as well, balances across products such as credit cards, personal loans, and auto are likely to continue to grow.”
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[Fox Business] Legendary investor says he would give Bidenomics ‘an F’
A famous investor is giving the Biden administration’s economic policies a failing grade.
Duquesne Family Office CEO Stan Druckenmiller appeared Tuesday on CNBC’s “Squawk Box” to discuss Fed policy.
“Ugh, Bidenomics,” Druckenmiller scoffed. “If I was a professor, I’d give them an F.”
“Basically, they misdiagnosed COVID and thought we were going into a depression. The Fed did, too. I worried about it, too, in early days. The Fed eventually pivoted, better late than never. Treasury is still acting like we’re in a depression,” he said.
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“I’ve studied the Great Depression, and you had a private sector crippled with debt, with basically no new ideas. So interventionist policies were called for and were effective. The private sector could not be more different today than it was in the Great Depression,” the investor said.
Druckenmiller cited multiple cutting-edge technologies such as A.I. and blockchain and suggested, “All government needed to do was get out of their way and let them innovate.”
By contrast, he asserted that the government has “spent and spent and spent, and my new fear now is that spending and the resulting interest rates on the debt that’s been created are going to crowd out some of the innovation that otherwise would have taken place.”
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He also argued that so much focus on stocks and avoiding a recession ignores how average Americans are impacted far more by issues like gas prices and inflation.
“The average American cares a lot more about gasoline prices than they do about stock prices, and they are getting hurt,” Druckenmiller said, going on to reference a previous interview about how Americans are being priced out of the housing market.
“Inflation is 20 percent-21 percent higher than it was in 2019. To me, even politically, that’s more consequential than keeping the markets up or, you know, trying to nail the soft landing and not having a recession.”
The White House didn’t respond to a request for comment.
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