Gen Z Debt Growth Outpaces Older Generations as BNPL Use Rises
SS
Spencer Stanton
BNPL debt risk · Apr 14, 2026
Source: DojiDoji Data Terminal
Gen Z adults carry an average of $34,000 in total debt. While this total is lower than the balances of millennials or Gen X, Gen Z debt is growing faster than any other generation. This growth is driven by high inflation and high interest rates as these borrowers enter the workforce.
Approximately 40% of Gen Z consumers use Buy Now, Pay Later (BNPL) services. A LendingTree survey found that 41% of BNPL users made at least one late payment in the past year, up from 34% previously. Most BNPL loans are interest-free, but they charge late fees, which vary by lender and rarely exceed $10 per late installment.
Defaults on these services can be reported to credit reports, damaging credit scores. This risk is compounded for those using credit cards—where interest rates often exceed 20%—and student loans, which average between $20,000 and $23,000 for Gen Z.
Lenders generally consider a debt-to-income (DTI) ratio above 36% to be a high risk. The most significant financial risk occurs when borrowers use credit cards or BNPL for everyday living expenses, such as groceries, rent, and utilities.
BNPL debt riskBNPL regulation
The Ledger Morning
The essential intelligence to start your trading day. Delivered 6:00 AM EST.
Join 50,000+ professionals who start their day with The Digital Ledger.