While many young people in Texas and across the country used to be known for avoiding debt, a growing number of younger Americans are facing difficulties repaying their credit card bills. According to a report by the New York Federal Reserve, overdue payments are rising among Americans age 18 to 29. Because millennials came of age during the financial crisis of the late 2000s, many of them have been hesitant to embrace significant debt. However, young people are also entering high-paying professional jobs, and they may feel better placed to pay off their credit card bills.
According to the study, credit card debt that was overdue by at least 90 days comprised 8% of the balances carried by younger people. There are a number of reasons why debt can stack up and go unpaid. While people may have signed up for their credit cards and accumulated debt while they were doing well financially, they may feel trapped after a job loss, medical crisis or other issue that has cut their income. In addition, credit card debt continues to rise. Interest rates are very high and have gone up as the Federal Reserve has raised the prime rate. Even people with good credit regularly pay rates of at least 18% on their balances.
More young people have taken out credit cards after card issuers developed strategies to appeal to their generation. Traditional incentives like cash back and zero-interest promotions have done little to attract millennials, but signup bonuses and travel credits have inspired many to open accounts. When circumstances change, card holders can find themselves facing insurmountable balances.
Of course, people of every age struggle with a massive debt burden, especially related to credit card debt. An attorney may provide guidance on options to seek debt relief, including Chapter 7 or Chapter 13 personal bankruptcy.