Millennials transitioning to adulthood after the Great Recession had it tough. But the finances of today’s early twentysomethings are even worse.

Gen Z consumers ages 22 to 24 have higher debt levels and delinquency rates for a number of credit products — from credit cards to mortgages and student loans — than Millennials did at the same age a decade ago, according to a new report from credit bureau TransUnion. In fact, the average credit card balance for early twentysomethings was $2,834 in 2023. That’s 26% higher than the balance Millennials carried at the same age in 2013 after adjusting for inflation.

Today’s young adults have been criticized for going on shopping sprees for little luxuries. But the one-two punch of a pandemic-induced recession and rapid rise in inflation has come at a critical time in their financial journey. Record high rents are also disproportionately impacting young adults.

“Overall spending has been strong and wages aren’t keeping up,” said Charlie Wise, a senior vice president at TransUnion. “Rent is really taking a bite out of their paychecks as the costs of discretionary spending like eating out is much higher. And they’re relying on credit to do that.”

Moreover, people in their early 20s are making less than their Millennial counterparts did, earning just $45,493 compared to $51,852 when adjusting for inflation. That means they have less money to cover higher sticker prices and, as a result, are turning to credit to bridge the gap, Wise said.

To be sure, Gen Z is hardly the only one relying on credit to swallow soaring costs. The total and average credit balances for consumers are hitting levels last seen before the Great Financial Crisis, Wise said. Still, Gen Z is starting out their adult lives with more lines of credit, higher delinquency rates and a higher debt-to-income ratios than Millennials did at the same age. Today’s 22-24 year olds have an average debt to income ratio of 16% compared to 12% for Millennials of that age in 2013.

This article was provided by Bloomberg News.