Millennials Suffer from More Credit Card Debt Than Ever Before
Are you racking up more credit card debt than in past years? If so, you aren’t alone. A new survey conducted by Rent.com revealed the shocking reality of debt among younger Americans: a stunning 75 percent spend more than they earn each month. For most of these young spenders, the disturbing trend stems not from reckless spending, but from the increasingly high costs of necessities like rent, transportation and food. The result? Young people today are accruing debt at a far faster pace than their parents’ generation.
Middle Millennials Suffer From Credit Card Debt
Research from The Ohio State University gives more cause for concern in that young people are also slowest to pay off debt. In fact, the age group of 30-35 is both racking up the most credit card debt and paying it off more slowly than other age groups. Compounding this financial trouble is the fact that many young people, especially renters who have not owned property, have little credit history. This equates to higher interest rates on credit cards, meaning higher total payments over time and, for some consumers, a vortex of debt from which it is difficult to emerge.
If the credit trend continues, researchers worry that a future generation of senior citizens will be crushed under debt from their younger years. Says Ohio State University Professor Lucia Dunn, “Many people are borrowing on credit cards so heavily that payoff rates at these levels are not sufficient to recover their debt by the end of their life.”
What to Expect from Expanding Debt
The implications of debt will have far-reaching impact much earlier than old age, too. Researchers found that those struggling under a constant cloud of debt are less able to save for their own homes, for their children’s college educations, and for unexpected medical bills.
Consumers looking for assistance with credit card debt may visit the Federal Trade Commission for information and guidance on coping with and eliminating debt.
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