Credit cards used to be a convenience. Now they’re a necessity for millions of Americans relying on taking on debt for groceries, gas, and other daily essentials — all while facing the highest interest rates in decades and the lingering effects of historic inflation.
This financial pressure is especially acute for younger generations, who are navigating the early stages of their financial lives in a particularly unforgiving economic climate.
Younger Americans are more likely to overuse their credit cards¹ and rack up lasting debt for several key reasons. They are earlier in their careers with less accumulated savings to fall back on, and they face a particularly challenging job market for entry-level workers.² The fact that federal student loan payments have recently resumed has only compounded these financial challenges, squeezing monthly budgets even tighter. As a result, more and more young adults are delinquent on their credit card payments, according to the Federal Reserve Bank of Philadelphia, signaling a growing crisis for the nation’s youngest adults.
To identify where these financial pressures are most intense, researchers analyzed the most recent data from the Federal Reserve Bank of Philadelphia. The study looks at credit cardholders ages 18 to 34 who have severely delinquent credit card debt and pinpoints the U.S. metropolitan areas and states where young people are struggling the most with credit card debt.
For the purposes of this study, card debt is considered severely delinquent after 90 days.
Worst Cities for Young Adult Delinquent Credit Card Debt
Memphis, Tennessee, ranks as the U.S. metropolitan area where young people are struggling the most with credit card debt. In Memphis, an alarming 27.5% of credit cardholders between 18 and 34 have severely delinquent accounts, nearly 7 percentage points more than the next closest large metro area. This struggle may be linked to the city’s economic landscape, where the city grapples with one of the highest poverty rates among large U.S. cities.
In Atlanta, Georgia, where 20.8% of young adults are severely delinquent on their credit card payments, the cost of living is rapidly outpacing wage growth. As a major economic hub, Atlanta has experienced recent population growth, and its affordable housing has been unable to keep up. Though its job market remains robust, wages for many young adults may not be able to keep pace with housing costs.
Jacksonville, Florida, faces a similar dynamic, with 20.4% of its young cardholders in severe delinquency. The financial struggles among the city’s young adults could be the result of the lingering housing affordability crisis, partially caused by Florida’s recent status as a top destination for migration. Though 2025 saw the Jacksonville housing market cool modestly, this comes on the heels of a long period of explosive growth.
The rest of the top 10 — including Las Vegas, Nevada (19.9%); Birmingham, Alabama (19.3%); Riverside, California (19.0%); Orlando, Florida (18.7%); Tucson, Arizona (18.1%); and Houston, Texas (18.3%) — are in the Sun Belt and largely grappling with stresses of population growth. The one outlier here is Cleveland, Ohio (18.0%), whose economy ranked in the bottom tier among U.S. metropolitan areas in terms of economic growth, according to the Milken Institute.
Best Cities for Young Adult Delinquent Credit Card Debt
At the other end of the spectrum, San Jose, California, stands out as the area where young people manage their credit card debt most effectively. In the heart of Silicon Valley, just 7.1% of cardholders 18 to 34 have severely delinquent accounts — a full 2 percentage points lower than the next-best-performing metro area. This financial health is likely a direct result of the region’s high-wage economy, where the technology sector provides exceptionally high starting salaries that give young professionals a crucial buffer against the area’s notoriously high cost of living.
Following closely are a pair of other major technology hubs: San Francisco, California (9.1%), and Seattle, Washington (9.2%). Much like in San Jose, the economies in these cities are dominated by high-paying industries in tech, finance, and biotechnology. While these metro areas are among the most expensive in the nation, the prevalence of 6-figure starting salaries for young, educated workers provides them with the financial means to cover high housing costs and other expenses without falling into severe debt.
Boston, Massachusetts, ranks fourth, with a severe delinquency rate of 9.4%. The city’s strong performance can be attributed to its elite concentration of universities and a diversified, knowledge-based economy focused on health care, education, and finance. This creates a robust job market for recent graduates with strong earning potential, allowing them to navigate the city’s high cost of living more successfully than their peers in other regions.
The remaining cities where young people struggle least with severely delinquent credit card debt — including Minneapolis, Minnesota (9.9%); Salt Lake City, Utah (10.4%); Honolulu, Hawaii (10.5%); Portland, Oregon (11.2%); Denver, Colorado (12.1%); and Washington, D.C. (12.3%) — share a common theme. They are all characterized by dynamic, healthy job markets that offer young professionals strong opportunities and above-average wages. A notable member of this group is Minneapolis, which boasts an economy anchored by a high concentration of Fortune 500 company headquarters, providing stable, well-paying corporate career paths for its young residents.
Young Credit Cardholders With Severely Delinquent Debt by State
At the state level, the trends in credit card delinquency largely mirror the patterns seen in the analysis of metropolitan areas. The states where young people are struggling the most are overwhelmingly concentrated in the South and the broader Sun Belt region. Mississippi leads the nation with nearly 24% of its young cardholders in severe delinquency, followed closely by Louisiana, Arkansas, Alabama, Georgia, and West Virginia, which all have rates above 21%. This regional pattern suggests that widespread economic challenges, including lower median household incomes and fewer high-paying career paths for young adults, contribute to greater financial instability and make young people rely more on credit card debt.
Conversely, the states with the lowest rates of severe delinquency are a more diverse mix, representing several different regions across the country. Utah and Vermont have the best outcomes, with delinquency rates of just 9.1% and 9.3%, respectively. Other top-performing states include Minnesota, Wisconsin, Washington, and Idaho. This variety indicates that there is no single path to financial stability for young people; It can be achieved in states with high-wage, knowledge-based economies and those with more modest living costs balanced by stable job markets and opportunities for growth.
Change in Severely Delinquent Credit Card Debt Over Time
While these geographic disparities are stark, they are all part of a broader national trend: The financial strain on young Americans is growing at an alarming rate. After reaching a historic low in 2021 — largely thanks to pandemic-era stimulus and student loan forbearance — the share of young adult cardholders with severely delinquent credit card debt has sharply reversed course, climbing by nearly 5 percentage points in less than 4 years. While delinquency has risen across all age groups, the problem is consistently more acute for the young adult demographic, whose rate of severe delinquency remains more than 2 percentage points higher than the average for all adults.
Full Results
Methodology
To determine where young people are struggling the most with credit card debt, researchers at Upgraded Points analyzed the latest data from the Federal Reserve Bank of Philadelphia’s Consumer Credit Explorer. The analysis looked at credit cardholders ages 18 to 34 and used their data to calculate the share of young cardholders with severely delinquent credit card debt in both Q1 2025 and Q1 2022, as well as their average credit card debt and the share of them utilizing over 75% of their credit limits. Credit card debt is considered severely delinquent after 90 days. For relevance, metropolitan areas were grouped into population cohorts: large (more than 1 million), midsize (350,000 to 1 million), and small (less than 350,000).
Final Thoughts
For young Americans navigating the early stages of their careers, this analysis shows that the risk of falling into severely delinquent credit card debt is not evenly distributed but deeply connected to local economic conditions. In some parts of the country, a combination of stagnant wages and a rising cost of living creates a tight financial squeeze, making it difficult for many to get by without relying on credit. In other areas, robust job markets with higher salaries provide a crucial buffer, allowing young adults to manage their expenses and build a stronger financial foundation.
With persistently high interest rates making debt more punishing and student loan payments squeezing budgets, the underlying strength of a local economy becomes paramount. These broad financial pressures affect everyone, but their impact is magnified in areas where wages are lower, job opportunities are less plentiful, or housing is becoming less affordable. For young adults trying to get ahead, this study shows how local economic realities can either provide a buffer against these headwinds or worsen their impact, often making the difference between financial stability and a cycle of debt.
References
- Merritt, Jessica. Upgraded Points. (2024, December 11). Credit Card Utilization: How Much of Your Credit Should You Use? Retrieved on August 25, 2025, from https://upgradedpoints.com/credit-cards/credit-card-utilization/.
- Stooksbury, Keri. Upgraded Points. (2025, August 12). The Most and Least Affordable Cities for Recent College Graduates [2025]. Retrieved on August 25, 2025, from https://upgradedpoints.com/news/cities-college-grads-most-least-affordable/.
