Why Is Gen Z Spending Like The World’s Ending? - Caleb Hammer
In a Nutshell
Gen Z is racking up record credit card and buy-now-pay-later debt because doom-scrolling algorithms and bleak economic news have convinced them the future is hopeless, triggering a self-reinforcing “fuck it” spending cycle. Consumer sentiment sits near historic lows even though spending and GDP remain relatively healthy, showing the gap between perception and reality is driving the behavior. The bankruptcy case illustrates the outcome: financing depreciating assets like campers and motorcycles leaves people trapped with unaffordable minimum payments and no path to real assets like homes.
These notes were generated by AI and may contain inaccuracies.
Gen Z borrowers are carrying more credit card debt than millennials did at the same age despite growing up with more financial information than any generation before them. 98% of Gen Z say credit is important, but only 53% believe they have adequate access to it. More than half of Americans have used buy now pay later services, and 59% of those users were Gen Z.
Buy now pay later services are at every checkout for concerts and everyday purchases, making them easy to use through tap to pay. Gen Z is engaging in a "Doom Loop" where algorithms expose them to constant negative information, leading them to believe everything will be bad forever, so they spend money and put purchases on credit cards.
People are unsure about the future and feel things are not going to get better, leading to a "well, fuck it" mentality similar to the end of days. During the Blitz in World War II in London, the amount of casual sex increased significantly while lingerie sales stayed the same because people thought they might die tomorrow. This represents the financial equivalent of that behavior.
This creates a recursive system and self-reinforcing mechanism. Negative information about the economy, quality of life for young people, and the belief that things will never get better encourages people to behave in ways that make those beliefs true. This becomes a self-fulfilling prophecy. There are real material changes, but the situation is worsened by this cycle.
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