Gen Z is way behind on credit-card payments. It could get even worse when student-debt payments restart.

• Gen Z is missing their credit-card payments at a rising rate.
• Their finances could get even worse when student-debt payments resume later this year.

Gen Z is still racking up credit-card debt, and they're starting to have trouble paying it back.

That's according to a new New York Fed report, which found that among US 18 to 29-year-olds, 8.31% of credit-card debt transitioned to serious delinquency — which means 90 days or more past due — between January and March of this year, up from 5.12% over the prior year period.

The increase marked the highest level since the delinquency transition rate was between 8% and 10% for four consecutive quarters between 2019 and 2020. Prior to that, the rate hadn't been this high since 2010. Inflation and near record high credit card interest rates are two big factors weighing on consumers, according to Bankrate's senior industry analyst Ted Rossman.

If young Americans are struggling to pay down their credit-card debt now, things could get even tougher when student-debt payments resume later this year after an over-three-year pause. As of June 2022, 36% of Gen Zers had student debt, holding an average balance of $20,900, according to the St. Louis Fed.

Due in large part to this pause, only 0.94% of student-debt balances were 90 days or more past due as of the end of March, according to the NY Fed, down from 1.05% a year prior and the over 10% before the pause began in 2020. Currently, those payments are set to resume 60 days after June 30 or 60 days after the Supreme Court issues a final decision on the legality of Biden's broad plan to cancel up to $20,000 in student debt for federal borrowers, whichever happens first.

"The emergency period is over, and we're preparing our borrowers to restart," Education Secretary Miguel Cardona said last week.

It's not just young borrowers struggling to pay off their credit-card debts, however.

Among all age groups, 4.57% of credit-card debt transitioned to serious delinquency, up from 3.04% the year prior. Total US credit-card balances were largely flat compared to year end at $986 billion, a sign that Americans are struggling to get a handle on their debts, according to Bankrate's Rossman.

"Normally, credit-card balances fall from Q4 to Q1 as the dust settles on the holiday shopping season and consumers prioritize debt payoff as a New Year's resolution," Rossman said in a statement provided to Insider. "In fact, this is the only time since the New York Fed started tracking these figures in 2003 that credit-card balances did not fall from Q4 to Q1."