Considering that Gen Xers sit squarely in middle age — this generation was born between the mid-1960s and 1980 — it's not all that surprising they have the highest household debt according to data from Experian. After all, they're likely busy juggling kids, aging parents, mortgages, car loans and all the various costs associated with adulthood.
According to the Experian 2020 State of Credit report, the average Gen X consumer has about $32,878 in non-mortgage debt, such as credit cards, student loans, car loans and/or personal loans. Gen X homeowners have an average mortgage balance of $245,127.
Millennials are right behind them, with $27,251 in non-mortgage consumer debt and $232,372 in mortgage debt, and their debt is growing at the fastest rate of any generation.
Here's a full break down of Experian's 2020 findings:
2020 State of Credit Findings
| 2020 findings by generation | Gen Z (ages 24 and younger) | Millennials / Gen Y (ages 25 to 40) | Gen X (ages 41 to 56) | Boomers (ages 57 to 74) | Silent (ages 75 and above) |
|---|---|---|---|---|---|
| Average VantageScore® | 654 | 658 | 676 | 716 | 729 |
| Average number of credit cards | 1.64 | 2.66 | 3.3 | 3.45 | 2.78 |
| Average credit card balance | $2197 | $4651 | $7718 | $6747 | $3988 |
| Average revolving utilization rate | 30% | 30% | 32% | 24% | 13% |
| Average number of retail credit cards | 1.64 | 2.1 | 2.59 | 2.63 | 2.21 |
| Average retail credit card balance | $1124 | $1871 | $2353 | $2100 | $1558 |
| Average non-mortgage debt | $10942 | $27251 | $32878 | $25812 | $12869 |
| Average mortgage debt | $172561 | $232372 | $245127 | $191650 | $159517 |
| Average 30–59 days past due delinquency rates | 1.60% | 2.70% | 3.30% | 2.20% | 1.20% |
| Average 60–89 days past due delinquency rates | 1.00% | 1.50% | 1.80% | 1.20% | 0.70% |
| Average 90–180 days past due delinquency rates | 2.50% | 4.40% | 5.30% | 3.20% | 1.90% |
Source: Experian
How to ease the burden of debt
Debt is a reality that most Americans live with. Some have higher debt tolerances, meaning they are more comfortable taking on sizeable loans and/or paying down debt over several years in order to achieve the quality of life they want.
While consumer debt is something people learn to live with, it can be really expensive when you take time to consider the interest charges you're paying month after month. Mortgages and student loans often have more reasonable APRs, but credit card interest charges can add up quickly.
There are a few ways that consumers of any age can make debt more manageable, so you can shift your focus to saving money.
Consider these good financial habits to prevent debt from being your downfall in your 40s and 50s.
1. Save for retirement early
Every financial advisor will tell you to start saving for retirement in your 20s. But if you're behind in hitting those big savings goals, don't be deterred. It's never too late to start saving, you just might need to be more aggressive.
To maximize your retirement investments, consider using a credit card that lets you invest your rewards. The no-annual-fee Fidelity® Rewards Visa Signature® Card gives account holders 2% cash back on all eligible spending that can be deposited into up to five Fidelity accounts, including IRAs. According to Fidelity's cash-back calculator, charging $1,800 per month to your Fidelity Rewards Visa Signature card could translate to $432 cash back in a year and $19,312 extra in your investment portfolio over 20 years.
Read more about the best credit cards for investing rewards.
Don't miss: Here’s how much money you should have saved at every age to retire by 67
2. Prepare for your kids' college while they're young
Consider contributing toa 529 plan starting when your kids are still little.These plans offer tax-free withdrawals when the money is taken out to pay for college, which both saves you money and helps you plan ahead.
Pair this strategy with a credit card that allows you to transfer your cash back into a college fund to maximize your savings even more. The Upromise® Mastercard®offers 1.25% cash back on every qualifying purchase, and you can link your card to an eligible 529 College Savings Plan to potentially earn 15% more on the money you deposit.
3. Sign up for a checking account that earns you money
While you can earn up to 6% cash back with the best credit cards, there are also a few checking accounts that give you the opportunity to earn cash back with your debit card. The Discover® Cashback Debit Checking is a good option for those interested in making their debit card go the extra mile. You can earn 1% cash back on up to $3,000 in debit card purchases each month, equaling $30 cash back per month and $360 annually.
This extra cash could help you pay for gifts and avoid the holiday debt hangover that's all-too-common at the start of each new year.
The Discover Cashback Debit Account also has no fees and no account minimums, so you won't be wasting extra money just to have a bank account. The daily ATM withdrawal limit for each account is the lesser of $2,000 or your available balance.
Don't miss: Get a head start on holiday saving with these helpful tips
Bottom line
While Gen X consumers have the most debt of all generations, they also have the highest average credit score. The average VantageScore for Gen X is 676, which is just above the threshold for prime credit. That means Gen X can still qualify for affordable loans and better credit cards.
If you want to take aggressive steps to get your consumer debt under control, some credit cards and personal loans can help. Just make sure you have a clear pay-off plan so you don't fall back into a debt cycle.
Learn more:
- The average American has $90,460 in debt—here’s how much debt Americans have at every age
- FICO Scores are used in 90% of U.S. lending decisions—here’s where to get yours for free
- 3 money moves you should take before 40
Information about the Fidelity® Rewards Visa Signature® Card and Upromise® Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
