Gen Z is racking up credit card debt at a faster clip than any other generation, according to a TransUnion report.

As of mid-last year, Gen Zers–those born between 1995 and 2005–accumulated a total of $55 billion in credit card debt, a 52% jump from $36 billion a year before.

The average Gen Zer holds a credit card balance of $2,834. That's a whopping 25% higher than what Millennials had at the same age back in 2013, according to TransUnion.

Adding to the growing credit-card trend, TransUnion’s surveys found that 50% of Gen Z consumers plan to apply for new credit within the next year compared with 32% for the entire population.

“It makes sense to see Gen Z consumers’ use of credit cards and personal loans increase relative to consumers as a whole as they age into financial independence,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion.

U.S. consumers’ debt problem

It’s not just Gen Z who’s racking up the debt; the total credit card balance reached $1.06 trillion as of the end of May, a 23.7% increase from $858 billion before Covid.

And while Gen Z is piling on debt the fastest, recent Credit Karma data shows that Gen X—those born between 1965 and 1980–still carries the highest amount of debt.

Gen X consumers hold an average of $63,571 in debt–$10,000 higher than Baby Boomers, who have accumulated $53,938 worth of debt.

“Gen X once again had the most credit card debt, but Gen Z increased their credit card balances by a larger percent,” according to the Credit Karma report.

According to Raneri, a big driving factor for soaring credit card debt across all generations of consumers is inflation.

“Like the overall population, many Gen Z borrowers are facing the same financial challenges brought on by high interest rates and inflation,” he said.

“As a result, they are tapping into these available credit products to help them cope with rising expenses and the tightening of their monthly budgets.”

Why this may not be bad

Although Gen Z is accumulating debt fastest, this generation may be best positioned to handle it moving forward.

Research from TransUnion indicates that Gen Z’s swelling balances aren’t a sign of lavishness. Instead, they signify the generation is entering adulthood and handling finances on their own.

“Young consumers today are better educated about their credit,” said Matt Komos, VP of financial services and consulting at TransUnion.

“They can benefit from numerous tools and resources, such as free credit scores and credit score simulators that show the potential impact of paying off debt or opening a credit card.”

Even as Gen Zers show a healthier relationship with credit than previous generations, experts warn to use credit with caution as prices and interest rates remain high.