Gen X, Boomers see credit cards as lifeline

Debt delays many in saving for retirement

Generation X, weighed down by debt, is unfortunately growing accustomed to the burden.

Gen Xers — and their older, Baby Boomer counterparts — see credit cards as a lifeline, according to a new study from Allianz Life.

Of the 1,000 Gen Xers ages 3548 and 1,000 Boomers ages 49-67 surveyed, 48% say credit cards function as a survival tool.

That reliance on debt is particularly troublesome for younger Americans, who often put off saving for retirement and other needs because of it.

“It’s really significant and I think it’s coming to a head with Generation X,” says Katie Libbe, vice president of consumer insights for Allianz Life, who noted that age group’s members tend to have greater total debt than Boomers. They are burdened, she says, by a “Bermuda Triangle” of financial stressors, including stu- dent loan debt, a tepid job market and homes that may be worth less than what they paid.

Among Gen Xers, 46% pay part of their credit card balance each month vs. 32% of Baby Boomers. The rest of both groups pay the entire amount or don’t use cards.

And 23% of Gen Xers say they don’t feel they can start saving for retirement until their credit cards are paid off. Still, Gen Xers aren’t nonchalant about their situation: 41% of those surveyed say they are uncomfortable with the debt they’re carrying vs. 25% of Boomers. But many Gen Xers seem to believe that they can’t do much about it, Libbe says. “There’s this sense that … ‘I can’t save for retirement because I’m barely getting by,’ ” she says.

The Allianz survey found that Gen Xers were carrying 38% more in mortgage debt, and 45% more in other debts, such as credit cards and student loans, than their Boomer peers. For instance, Gen Xers averaged $144,000 in mortgage debt as compared with $90,000 for Boomers, and $8,000 in average credit card debt as compared with $6,000 carried by the older generation.