Since they came of age during the stock market crash on Wall Street in 2008, many millennials have been wary of taking on debt from big banks. Unfortunately, new research shows that unpaid debts on credit cards are increasing for this younger generation. For Americans age 18 to 29, delinquencies 90 days or older surpassed 8%, which is the highest it has been in more than eight years. There are several factors driving this increase.
While older generations tend to favor credit cards with cash-back offers and low interest, millennials are more enticed by immediate rewards, like signup bonuses and extravagant gifts, even though the average interest rates on credit cards is 18%. Some cards have interest rates higher than 25%. Another factor for this debt may be a feeling that the economy is strong and will continue to remain that way.
Compounding the problem of credit card debt is student loans. Many millennials graduate with tens of thousands of dollars owed in student loans, and making those payments along with those for credit cards can be very difficult. Unfortunately, bankruptcy laws passed more than a decade ago make it harder than ever to discharge both types of debt. Student loan debt, in particular, is almost impossible to discharge unless the person can prove some kind of financial hardship.
Millennials or individuals of any generation who have excessive credit card debt may get some relief by filing for bankruptcy. The first step is to consult with a bankruptcy attorney who can analyze a person's financial situation and recommend a course of action. If someone meets the eligibility requirements for bankruptcy, his or her lawyer can help him or her file petitions, negotiate with creditors and make arguments in court.