Millennials increasingly lean on credit
Still, consumers often turn to credit cards, in part because they are more accessible than other types of loans.Overall, an additional 20.1 million new credit accounts were opened in the fourth quarter of 2023, boosted in part by subprime borrowers looking for additional liquidity, according to Wise. Subprime generally refers to those with a credit score of 600 or below, according to TransUnion.
Many people in this group are millennials, he said, who are burdened by high levels of student loan debt and the housing affordability crisis.
“If you can’t afford to buy and your rent keeps going up, that’s not a very happy set of circumstances,” Wise said.
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Average credit card balances jump 10% to a record $6,360 as more consumers fall behind on payments
Americans are increasingly leaning on credit to make ends meet, boosting balances and total debt to fresh highs.