Credit counseling agencies are seeing an increase in clients seeking help with debt, driven largely by millennials. Rising housing costs, expenses, and average debt loads are contributing to financial distress across generations. While millennials carry the highest proportion of clients seeking help, Gen X and baby boomers have the largest average unsecured debt. Experts advise creating a budget, exploring hardship programs, and seeking assistance from reputable credit counseling agencies.
More Americans sought help with their mounting debt last year, according to one of the country's largest nonprofit credit counseling agencies. The growing need for financial counseling was driven by young adults. Millennials accounted for 43% of all clients seeking counseling, making them the largest generational group. They were followed by Gen X at 30%. MMI financial educator Thomas Nitzsche said they saw “a really significant jump” in new clients last year, regardless of age.
It’s not just that more people reached out for help, but their indicators of financial distress were also on the rise. Housing costs are up, monthly expenses are up, and the average debt load is up significantly, Nitzsche said. “Even though average income continues to increase, it's not keeping up with the cost of living,” he said.Gen X and baby boomers carried the highest unsecured debt, averaging about $36,000 and $32,000, respectively. Millennial clients had an average unsecured debt of about $30,000, close to the overall client average. In 2024, 47% of millennial clients reported facing financial hardships due to excessive credit card use, higher than older generations. Young adults, the 21-30 group, carried lower unsecured debt. But their debt was rising at a faster rate than MMI’s overall client base.Nitzsche said younger adults are “just a more vulnerable population,” with lower earnings and savings who are earlier in their working careers. Nitzsche said he’s expecting to see a normal seasonal spike in new clients this month. People are looking to get control of their debt in the new year. Nitzsche offered advice for people who are struggling with debt, and the first step is to cut through the stigma to get the help that's available.The first step is just creating a budget, he said. Most of the clients MMI works with haven't created a formal budget to understand what's coming in and what's going out.Studies have found that about three-quarters of people are successful in getting a lower interest rate when they ask for it. A lot of creditors have hardship programs in place, or they'll work with a debt management group, such as MMI, to reduce interest rates.A 0% balance transfer card might be a good option for some people. You could pause your interest clock for up to 21 months with one of those cards.A reputable nonprofit credit counseling agency, such as MMI, can also help, especially for folks who don’t have the credit for a 0% balance transfer card or consolidation loan
Millennials Debt Credit Counseling Financial Distress Generational Trends Financial Advice
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