Gen Xers — and their older, Baby Boomer peers — see credit cards as a lifeline, according to a new study from Allianz Life.
Of the 1,000 Gen Xers age 35 to 48, and 1,000 Boomers ages 49-67 surveyed, 48% say that credit cards now function as a financial survival tool.
That reliance on debt is particularly troublesome for younger Americans, who often put off saving for retirement and other needs because of it.
"It's really significant and I think it's coming to a head with Generation X,'' says Katie Libbe, vice president of consumer insights for Allianz Life, who noted that members of that age group tend to have greater total debt than Boomers. They are burdened, she says, by a "Bermuda Triangle'' of financial stressors, including student loan debt, a tepid job market, and homes that may be worth less than what they initially paid.
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The survey highlights the potential drawbacks of having easy access to credit cards, with 76% of Gen Xers and 68% of Baby Boomers saying they received their first credit card by the age of 24.
"I think that older generations ... were brought up a little bit more to live within their means because they didn't have access to a card,'' Libbe says. "I think what's been going on over the last 30 years is the acceptance of credit cards and credit card debt, which ends up masking the fact that you're living beyond your means.''
The Allianz survey found that Gen Xers were carrying 38% more in mortgage debt, and 45% more in other debts, such as credit cards and student loans, than their Boomer peers. For instance, Gen Xers averaged $144,000 in mortgage debt as compared to $90,000 for Boomers, and $8,000 in average credit card debt as compared to $6,000 carried by the older generation.
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