Posted on 12/22/2022 3:29:18 AM PST by EBH
Americans across the board are struggling with credit card debt. Those just starting out are particularly vulnerable.
With limited financial resources, lower wages and shorter credit histories, young adults are struggling to manage high-interest debt more than other age group, according to a new report by Urban Institute. Nearly one in five adults between the ages 18 and 24 with a credit record in the U.S. currently have debt in collections.
“Young adults are particularly vulnerable,” the authors of the report wrote. “The high cost of borrowing coupled with limited income makes it difficult to manage debt in this stage of life.”
Overall, credit card balances are surging, up 15% in the most recent quarter, the largest annual jump in more than 20 years. At the same time, credit card rates are now over 19%, on average — an all-time high — and still rising.
But for new applicants for credit, APRs are typically even higher, as much as 30%, according to Ted Rossman, senior industry analyst at Bankrate and CreditCards.com.
“When you have poorer credit, you have to pay more to borrow, which can make taking on debt even harder to pay back,” said Kassandra Martinchek, a research associate at Urban Institute and co-author of the report.
“Because young adults have this unique vulnerability, it’s easier for a financial shock to happen and throw you off your path,” Martinchek added.
(Excerpt) Read more at cnbc.com ...
Failing to comprehend that you can't spend more than you earn is hardly a unique vulnerability and is something that should have been overcome in primary school math class.
Cutting spending goes a lot further than increasing income. At least short term.
They must like it this way, since 68% of them recently voted for more of the same.
I think it is more important to recognize this is 20% of that age group.
20% WOw.
The use of the word vulnerable in this story is classic weaponized victimhood.
Related to Zoomers seeing themselves as children rather than adults
Adults make the decisions for their own lives whereas children are subject to the decisions of others, whether it be their “brain” or their parents.
School math, L O L
But for new applicants for credit, APRs are typically even higher, as much as 30%...
—
Loan sharks.
Someone needs to tell our government that.
Among the countless life lessons my parents taught me was this one that has served well and kept me out of debt my whlife:
“If you can’t afford it ____ DO WITHOUT!
Kids nowadays are spoiled and entitled.......by who?....the parents of course......that’s where it all starts IMO.
stories of early delinquencies have been around for years. A clueless young person falls into this trap often with a store card instead of a regular card. It becomes a learning experience for many, they learn how debt works and never repeat it. An early blemish in the credit history of people is common for all those who were not adequately warned by their parents or someone else.
Stop borrowing money, problem solved
On the flip side they see government doing it for their entire lives.
Only they can’t just print money to pay their bills.
“Cutting spending goes a lot further than increasing income.”
Extra bonus—the money saved by cutting spending is income tax free.
Increased income is taxable.
Starting out, my digs were furnished in a style known as “early attic”. If the upholstery had a worn spot you put a blanket over it. Nowadays kids buy brand new leather furniture. No money down! No payments for five years! Just sign right here. The kids today don’t want our old furniture, china, silver, etc. We were grateful to get it. Some still have some of it. I still have iron skillets that go back generations.
1 in 5? That sounds wayyyyyy too low.
Yep. Too many people buy and worry about trying to pay for it later. My parents taught me that if you want something, you WAIT and SAVE the money needed to buy. Buying comes last, paying for it comes first.
My dad always used to say the difference between those who are financially stable and those who are not is the ability to delay gratification.
I pay all credit card balances in full every month. I only use credit cards that have no annual fee and which give me cash back.
Our ONE credit card is for emergency use only.
We will on occasion purchase a big ticket item on 6 or 12 months same as cash......BUT we already have funds available to purchase, we just done want to have that expenditure all at once.
Never really understood peoples inability to manage money.
Biden to the rescue.
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