How You Compare to Others Just Starting Out

If you’re in your 20s and staring down a pile of debt, you’re not alone. The average person in their 20s owes $19,962, including mortgages, student loans, credit cards, and car payments. About 42% of adults aged 18-29 who went to college carry student loan debt, and Gen Z holds an average of $3,493 in credit card balances. The reality is that nearly two-thirds of people in their 20s carry debt.

Student Loans Dominate Early Debt

Student loans generally comprise the majority of debt for a person in their 20s who went to college. Federal borrowers owe an average of $39,075, though the median sits lower at around $20,000 to $25,000. The average balance is closer to $14,162 for those under 25. People in their late 20s owe an average of $33,150 as many are finishing grad school or racking up interest.

Student debt makes up 28% of total debt for people under 30—higher than for any other age group. Your income plays a key role in how well you can tackle your debt. A $30,000 balance on a $55,000 salary may be manageable whereas that same balance on a $35,000 salary would be more difficult to manage.

Credit Cards Are Small But Dangerous

Gen Z carries an average credit card balance of $3,493, according to Experian’s 2025 data. For millennials in their early 30s, that number nearly doubles to $6,961. And 72% of Gen Z with credit history carry a balance month to month.

These balances might be small compared to student loans, but credit cards charge around 22% interest. Essentially, $3,500 balance can cost you about $770 a year in interest if you’re only making minimum payments. Credit card debt can compound rapidly, which is why even modest balances spiral if you’re not paying them down aggressively.

Cars, BNPL, and the Debt You Don’t See Coming

About 41% of Gen Z has an auto loan, with an average balance of $20,893. Cars are necessary for most people to get to work, but they lose value the second you drive off the lot, meaning you may find yourself owing more than your car is worth.

​Then there’s Buy Now, Pay Later. Around 44% of Gen Z used BNPL services in 2024—that’s 30 million young people splitting purchases into installments. The average user took out 6.3 BNPL loans in 2023, spending $848 across all lenders.

How to Know if You’re Falling Behind

Your debt load matters less than these four things:

• Can you make your minimum payments without using more credit?
• Is your total debt balance shrinking, or at least staying flat?
• Are you avoiding high-interest debt like credit cards and payday loans?
• Do you have any emergency savings—even $500 makes a difference.

If you answered no to most of these, that’s your warning sign. One in three Gen Zers has zero emergency savings, and 34% of millennials are in the same boat.

When Debt Becomes a Real Problem

Miss a credit card payment, and in addition to being behind, you’ll pay late fees and damage your credit score. Using BNPL to cover groceries or regular bills means your income isn’t covering your life, and that’s unsustainable. Carrying balances month after month without a plan to pay them off can turn manageable debt into a burden.

The Bottom Line

Consider focusing on the debt that’s charging the most interest first, which is generally credit cards. Next, build a small emergency fund—$1,000 or $2,000—so you’re not reaching for a credit card every time you face an unexpected expense, such as when your car needs new tires. When you get a raise, you may want to resist the urge to spend the money and instead create a budget for debt repayment and savings.

And if you are using credit, treat it like a tool, not a solution. Debt should help you improve your financial life, not just keep you afloat.