What is the Average Credit Card Debt for Millennials
Many young people graduated college with a large pile of debt. But student debt is not the main reason why a lot of young people are in debt. According to recent the statistics, young adults in between 18 – 24 years old spend more than what they are earning in their wages. It is estimated that young adults born in between 1980 – 1984 have an average credit card debt of over $5,000.
They rely on credit cards to pay for their living expenses while waiting for their next pay check. It is always best to save money money so that you can use your savings to pay your living expenses instead of relying on the credit card. If you use credit card, you will still have to pay back the interest fees for the things you buy many years afterward.
Usually, young people do not yet have an established credit history. As a result, they are charged with an even higher interest rate which can make it harder for them to pay back since they are still young and not yet earning enough. The young people of this generation also pay off their debt at a much slower rate compared to the previous generation. For this reason, it could be that these young people will never be able to come out of their debts.
The Ohio State University report claims that more people will die with a lot of unpaid debt if the trend continues. When they die without clearing their debts, the bank can file a lawsuit against any asset the deceased have. The bank will have to eat the losses if the decease do not have any asset. This is because the bank can’t go after the family members of the deceased.
The reason why many young people are in so many credit card debts is because they did not make any budget planning. It is hard to save money when you spend more than you earn on expensive food, beauty, subscriptions, lifestyle products, gadgets, and taxi fees. If you are serious about coming out of your credit card debt, you should compile a list of your monthly expenses and cut down the unnecessary expenses.
By cutting down the expenses, you will be able to set aside more money to pay your credit card debt. In this way, you don’t have to just make the minimum repayment. Making the minimum repayment will take you decades to clear off your credit card bill in full every month. You must have discipline and not spend more than you can pay back in full. If you stick to your budget, you will surely be able to promptly pay back your credit card bill and establish a good credit report at the same time.