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Which generation struggles the most with credit card debt?

A decade or so ago, credit cards seemed to be one of the last things on millennials’ minds. In 2012, only around 40% of millennials in their 20s had credit cards. As of 2019, over half — 52% — use credit cards to make purchases. Although it is not entirely clear why this generation shifted its opinion on credit cards, one thing is obvious — they are having trouble managing credit card debt.

On top of carrying a collective $370 billion for student loans, millennials now have the largest share of seriously delinquent credit card balances. About 8% of balances were categorized as such in 2019’s first quarter. However, student loans and other financial practices could part of the reason that millennials in Pennsylvania struggle with financial literacy. Considering that as many entered college, both institutions of higher learning as well as the government aggressively pushed student loans, claiming that the loans were a type of financial aid that would help them get an education.

Millennials were also exposed to excessive borrowing, debt and bailouts at crucial points in their development. Living through and aging into adults during the recession, many grew up watching their parents go right back to excessive borrowing once the economy recovered and near-zero interest loans were popular. These and other factors likely influenced millennials understanding of how to manage finances. With lower net worths than their parents had at the same ages, millennials did not stand much of a chance when emulating those financial behaviors.

Credit card debt is extremely difficult to dig out of. The average interest rate hovers around 17%, which means that some rates can be much higher. As interest rates force balances to continue growing, credit cards can easily fall into delinquency. To avoid experiencing further financial damage or trauma, pursuing bankruptcy sooner rather than later can be smart. This also gives young adults in Pennsylvania time to regroup and rebuild their finances.

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