Here’s why younger consumers are ‘struggling’ the most

As 2024 enters the holiday season, consumer spending remains resilient. However, concerns about credit card balances and payments persist among Americans. VantageScore CEO & President Silvio Tavares joins Asking for a Trend to discuss these financial dynamics. Tavares observes that the consumer appears to be healthy. However “there’s definitely risks on the horizon.” He highlights a significant trend in September, noting that banks have reduced new credit account openings across all major loan categories, including credit cards, personal loans, and auto loans. According to VantageScore data, this pullback suggests that financial institutions are sensing increased pressure, a sentiment echoed by consumers as evidenced by decreased credit card balances in September. Adding to these financial pressures, Tavares points out that uncertainties surrounding the upcoming election are further complicating the economic outlook. However, Tavares describes a clear divergence among consumer groups. Older consumers have shown resilience, while younger consumers are “struggling.” He attributes this “difference in experience” primarily to homeownership. “If you’re older, you own your own home. You’ve got a cushion there. You’re not exposed to inflationary pressures. Younger folks are not homeowners typically, and they are struggling with the increased interest rates,” Tavares explained.
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