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Study: Millennial Debt Is Rising the Fastest in These U.S. Metros

millennial debt

As a whole, millennials tend to have more debt than older generations. And they’re carrying more credit card debt than they used to, even though, theoretically, they should be earning more as they age and gain more work experience. Higher amounts of debt could leave millennials vulnerable to financial ruin during personal emergencies and economic downturns.

To better understand how millennials’ finances are changing, we looked at the top 101 metropolitan statistical areas across the U.S. to see how consumers’ debt loads have changed between 2018 and 2019. Here’s what we found.

Key findings

  • Millennials in Worcester, Mass. tacked on the most debt. According to our data, the median non-mortgage debt among millennials in that city increased by nearly 29% from $21,600 to $27,800. A significant chunk of that increase came from credit card debt, which rose by 27% on average.
  • Coming in second is another Northeast city: Bridgeport, Conn. Non-mortgage debt for millennials there jumped by 26%. Auto loan debt and credit card debt, which rose by 14% and 20%, respectively, were the main culprits for the overall increase.
  • Des Moines came in third. This metro area also had the highest median non-mortgage debt for millennials: around $33,500. Notably, Des Moines recently approved zoning changes which are likely to make the city more expensive, potentially putting more pressure on local millennials’ budgets.
  • At the bottom of the list is Las Vegas. Millennials here actually have less non-mortgage debt than they did a year ago. This suggests that millennials there do a good job managing their finances.
  • Fresno, Calif. is the only other metro in our analysis where average non-mortgage debt for millennials fell.
  • Overall debt rose in 99 of the 101 metros analyzed. While that may sound terrible, people are typically able to take on more as their earning potential increases, something which usually comes with age and experience in the labor market.
  • Average credit card debt increased in every metro area analyzed. Provo, Utah saw the smallest increase at 2%, while in Deltona, Fla. it was up 42% on average. Across all analyzed metros, credit card debt went from making up 16% of debt portfolios to making up 18% of them.
  • Auto debt and student loans make up the biggest chunks of millennial debt, at 34% and 39%, respectively. Both figures have declined over the past year.

Millennial debt is rising the fastest in these areas


Of the 10 places where millennial debt is increasing the most, seven cities experienced an increase of 20% or more:

  1. Worcester, Mass.
  2. Bridgeport, Conn.
  3. Des Moines, Idaho
  4. Memphis, Tenn.
  5. Stockton, Calif.
  6. Deltona, Fla.
  7. Columbia, S.C.

Of the top five places for increasing debt, three were located on the eastern half of the country. Interestingly, the largest non-mortgage debt amounts came from Des Moines, which ranks third on this list. Millennials there held an average $33,484 in non-mortgage debt in 2019.

Millennial debt only decreased in two places: Las Vegas (-1.3%) and Fresno, Calif. (-0.3%).

1. Worcester, Mass.

Millennial residents of Worcester had an increase in their non-mortgage debt by nearly 30% from 2018 to 2019, beating out Bridgeport by nearly 3%. That brings their total median debt to nearly $28,000.

Student debt constitutes this metro area’s largest debt type, with auto loans and credit cards following fairly close behind for 2019. Personal loans, on the other hand, only accounted for 9% of non-mortgage debts.

2. Bridgeport, Conn.

Coming in with the second highest percent increase in non-mortgage debts is Bridgeport. Residents there held a median of $28,797 in debt. Forty-one percent of the debt held by Bridgeport millennials were from student loans.

However, while student loan debt increased by about $2,000 from 2018 to 2019, the overall amount of education debt decreased by 2% as a portion of the total non-mortgage debt they held. That 2% was replaced by personal loans. This was likely due to the fact that personal loans can be used to refinance federal student loans.

3. Des Moines, Iowa

Of the 10 areas where non-mortgage debts increased the most, Des Moines residents actually ended up with the highest figure despite only having the third highest percent change in non-mortgage debts. Their median for 2019 was $33,484.

Auto loan debt actually decreased by 3% from 2018 to 2019, and that was replaced by credit card and personal loan debt, which increased by 2% and 1%, respectively.

Where millennials are racking up credit card debt the fastest

Southern regions of the U.S. saw high increases in credit card debt. For example, Deltona and Palm Bay, Fla. each experienced a 42% and 40% increase in average credit card debt, respectively.  The smallest increase from 2018 to 2019 was in Provo, Utah, where credit card debt increased by only 2%.

Here’s a breakdown of how all 100 areas ranked when it comes to annual increases in credit card debt:

1. Deltona, Fla.

Although auto loan debt constitutes the majority of Deltona millennials’ non-mortgage debt, credit card debt is on the rise in this metro area. It rose from around $4,000 to about $6,000 from 2018 to 2019, which represents a 42% increase, the most of any metro area studied.

However, for the region, the debt area with the largest increase was actually personal loan debt, which rose a stark 95% year over year.

2. Palm Bay, Fla.

Palm Bay millennials saw their credit card debt is higher than in Deltona, but overall it saw a slightly lower percentage change year over year. That amounts to a 40% mean change in this debt category.

In strictly monetary terms, credit card debt came in third for the metro area. Auto loan debt and student loans amounted to about $13,000 and $14,000 each in 2019. Similar to Deltona, the percent change for credit cards was outranked by personal loan debt, which has increased by 64% between 2018 and 2019.

3. Memphis, Tenn.

Credit card debt for Memphis millennials only accounts for about 12% of their non-mortgage debt; student loan debt accounts for about half of it, while auto loan debt takes up almost a third. Even so, from 2018 to 2019, resident millennials’ credit card debt rose by 38%. Overall non-mortgage debt rose by only 23%. The only debt type to outdo that growth was personal loans, which increased by 42% over that time.

Methodology

In order to create this analysis, researchers sampled anonymized data from over 300,000 MyLT users. We compared their non-mortgage debt from the second quarter of 2018 to the second quarter of 2019. We then found the percent change in non-mortgage debt to create the final ranks.

 

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