Bank of America tracks credit and debt spending by generation — how do you stack up?

Americans are swiping their cards more than ever ahead of the holidays, but the story behind the spending surge reveals a stark generational divide, as well as a trend that could put a strain on your wallet.

Total credit and debit card spending per household jumped 2.4% year over year in October, representing the strongest growth in nearly a year, according to Bank of America’s latest monthly report tracking millions of card transactions. But even as spending has grown, the actual number of retail purchases has fallen, suggesting that inflation is beginning to take a hit because Americans are paying more but getting less.

What’s even more surprising is who’s driving this spending growth. Baby boomers outpace younger generations by about five to one in increased spending on cards, but Generation X carries the highest credit card balances — an average of $9,600 per household, according to data from Experian.

The spending gap between generations

In detail, a 2024 Federal Reserve report found that Americans use credit cards (32%) or debit cards (30%) for more than 60% of their monthly transactions. People use cash only 16% of the time.

Your age range is a key indicator of how much you use your credit and debit cards, as younger generations are more likely to use their cards while older Americans maintain larger balances. In October, high-income households (which tend to be older) increased their spending by 2.7% year-on-year, while low-income households grew by just 0.7%. The wage story tells the same story: After-tax wage growth for high-income households was 3.7%, while low-income households saw wages rise just 1.0%, according to Bank of America.

What is behind generational differences?

Sources of income and housing costs: Despite being in their peak earning years and accounting for 27% of all consumer spending — the largest share ever — Generation X’s spending growth has slowed to just 0.1% year over year. Older families often benefit from Social Security, pensions, and investment income, which helps support steady spending growth. Younger families are paying a larger portion of their income on rent, child care, and student loans, which can crowd out discretionary spending on cards.

Labor market: Bank of America finds that job-changing wage increases slowed significantly for younger workers in 2025, weighing on their spending despite overall job growth.

Payment preferences: While overall credit and debit dominate, seniors 55 and older still use cash for about 22% of payments — about 1.5 times the rate of people under 55 — reflecting different levels of comfort with cards and digital tools. Younger adults are more likely to use debit cards to make smaller, everyday purchases and to try buy now, pay later (BNPL) programs.

Equilibrium behaviour: With Millennials and Gen Younger groups’ smaller balances reflect lower credit limits and shorter credit histories, but they can charge their cards quickly once their budgets tighten.

Quick tips for determining the right size for your card strategy

Once you compare yourself to others in your age group, you may notice that you have more debt than others. Here’s how to reduce your debt before it gets out of control:

• Put in automatic guardrail: Set up automatic payment for statement balances to avoid penalties and additional interest. You can also set an automatic alert when your purchases reach a certain threshold.
• Match the card to the category: Use the discount on small, predictable purchases if it helps limit overspending. Then use the credit when you can reliably pay in full and earn points or rewards, or when you need extra protection for your purchases (like when renting a car or traveling).
• Your reward sequence: If you’re carrying balances, use the avalanche method (targeting the highest interest rates first) to reduce the interest owed faster. Switch to snowballing (paying off the smallest balances first) if you need early wins to stay motivated.
• Plan for lumpy expenses: Boomers and Gen This means setting aside a fixed amount each month in separate, designated pools so that cash is ready when bills come due. Younger families can also budget ahead for future rent increases and child care expenses.
• Exposure to BNPL: If you’re bundling multiple BNPL plans, keep track of the total monthly payments. Consider consolidating into an introductory 0% APR or accelerator card to avoid budget creep.

National averages suggest that older Americans are driving the bulk of the recent growth in card spending, while younger groups are becoming more cautious. Measure your mix of balances and card usage against your collection – and adjust now so your card habits don’t hold you back from your goals.