Debt Among Youths
Below is an article relating to credit and debt.
The Growth of Debt Among Young Americans
"Generation Broke" is the second in a series of Borrowing to Make Ends Meet Briefing Papers. Reports a 55% average increase in credit card debt among America's young adults from 1992 to 2001.
Key Findings:
Young Adults (25-34 years old)
Average credit card debt among indebted young adults increased by 55 percent between 1992 and 2001, to $4,088 (2001 dollars).
The average credit card indebted young adult household now spends nearly 24 percent of its income on debt payments, four percentage points more, on average, than young adults did in 1992.
Among young adult households with incomes below $50,000 (2/3 of young households), nearly one in five with credit card debt is in debt hardship-- spending over 40 percent of their income servicing debt, including mortgages and student loans.
Young Americans now have the second highest rate of bankruptcy, just after those aged 35 to 44. The rate among 25-34 year olds increased between 1991and 2001, indicating that Gen Xers were more likely to file bankruptcy as young adults than were young Boomers at the same age.
The Youngest Adults (18-24 years old)
The youngest adults saw a sharper rise in credit card debt-- 104 percent-- to an average of $2,985 (2001 dollars).
The average credit card indebted household in this age group spends nearly 30 percent of its income on debt payments, double the percentage spent on average in 1992.
Among the youngest adult households with incomes below $50,000 (2/3 of younger households), nearly one in seven with credit card debt is in debt hardship.
Date: October 13, 2004
Tamara Draut and Javier Silva
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