Key Takeaways
- U.S. card spending per household rose 2.4% year over year in October and 0.3% from the previous month (the fifth straight increase), with payments for services leading the way.
- Older Americans are driving more of the growth, with Boomers outpacing younger groups in card-spending growth.
- The number of retail transactions has dropped since January, suggesting price increases, not more purchases, are driving the gains.
Americans are swiping their cards more than ever heading into the holidays, but the story behind the increased spending reveals a stark generational divide, as well as a trend that could put the squeeze on your wallet.
Total credit and debit card spending per household jumped 2.4% year-over-year in October, marking the strongest growth in almost a year, according to Bank of America’s latest monthly report tracking millions of card transactions. But even as spending grew, the actual number of retail purchases declined, suggesting that inflation is taking a bite as Americans are paying more but getting less.
Even more striking is who’s driving that spending growth. Baby Boomers are outpacing younger generations by almost five-to-one in card spending increases, but Gen X carries the highest credit card balances—averaging $9,600 per household, according to data from Experian.
The Spending Divide Between Generations
Zooming out, a 2024 report by the Federal Reserve found that Americans use credit cards (32%) or debit cards (30%) for more than 60% of their monthly transactions. People use cash just 16% of the time.
Your age group is a key indicator of how much you use your credit and debit cards, with younger generations still more likely to use their cards while older Americans hold larger balances. In October, higher-income households (which skew older) increased spending by 2.7% year-over-year, while lower-income households had just 0.7% growth. The wage story tells the same tale: after-tax wage growth for higher-income households hit 3.7%, while lower-income households saw wages rise only 1.0%, according to Bank of America.
Why This Matters To You
With Gen X carrying $9,600 in average card debt while younger workers see wages stall and Boomers benefit from wealth effects, understanding where you fall in this divide determines whether you need to aggressively pay down debt, protect your savings, or find new income sources just to stay even.
What’s Behind the Generational Differences?
Income sources and housing costs: Despite being in their peak earning years and accounting for 27% of all consumer spending—the largest share of any generation—Gen-X’s spending growth has slowed to just 0.1% year-over-year. Older households often draw from Social Security, pensions, and investment income, helping support steadier spending growth. Younger households pay a larger portion of their income on rent, child care, and student loans, which can crowd out discretionary card spending.
The job market: Bank of America finds job-changer pay bumps have cooled notably for younger workers in 2025, weighing down their spending despite overall job growth.
Payment preferences: While credit and debit dominate overall, older adults 55 and over still use cash for about 22% of payments—about 1.5 times the rate of those under 55—reflecting different comfort levels with cards and digital tools. Younger adults are more likely to use debit cards for smaller everyday purchases and to experiment with buy-now-pay-later (BNPL) programs.
Balance behavior: With Millennials and Gen-X having to pay what’s likely to be their peak family expenses (mortgages, teens/college, elder care), their average balances top the list. Younger cohorts’ smaller balances reflect lower credit limits and shorter credit histories, but they can charge up their cards quickly once their budgets tighten.
Warning
Holiday shopping accounts for over 20% of annual spending on general merchandise, electronics, clothing, and jewelry—making the final two months of the year more likely to bust your budget.
Quick Tips To Right-Size Your Card Strategy
Once you compare yourself with others in your age group, you might notice you have more debt than others. Here’s how you can downsize your debt before it gets out of hand:
- Put in automatic guardrails: Set up auto-pay for statement balances to avoid penalties and additional interest. You can also put in an automatic alert for when your purchases hit up against a certain threshold.
- Match card to category: Use debit for smaller, predictable purchases if it helps curb overspending. Then use credit when you’ll reliably pay in full and earn points or rewards, or when you need extra protections for your purchases (such as when renting a car or traveling).
- Sequence your payoff: If you carry balances, use the avalanche method (targeting the highest interest rates first) to cut interest owed fastest. Switch to snowball (paying off the smallest balances first) if you need early wins to stay motivated.
- Plan for lumpy expenses: Boomers and Gen-Xers can smooth cash flow with sinking funds for insurance and taxes. That means setting aside a fixed amount each month into separate, earmarked buckets so the cash is ready when bills come due. Younger households can also budget ahead for future rent increases and child care expenses.
- BNPL exposure: If you’re stacking multiple BNPL plans, track the total monthly payments. Consider consolidating into a 0% intro APR card or accelerating payoff to avoid budget creep.
National averages suggest that older Americans are driving more of the recent card-spending growth, while younger groups are being more cautious. Measure your mix of balances and card use against your cohort—and adjust now so your card habits do not work to hinder you from achieving your goals.
