I've read a lot over the last few weeks about debt. (Morbid, right?) But the odd thing is, the more stats I read, the more confused I get, especially when determining who has more debt - older consumers or younger consumers.
Well, something I'm definitely not confused about is that, no matter their age, the average American is definitely wading in some credit card debt. The last report we read from TransUnion said that in Q3 of last year, the average American was carrying close to $5,000 in credit debt alone. And sure - averages don't always tell the whole story, but they certainly begin the conversation.
OK, but who carries more debt: old people or young people? And how seriously should we take these numbers?
Alright, let's start with the older generation. A survey released by Demos.org in association with the AARP last week reports that consumers over 50 are carrying more debt than younger consumers. The survey pointed to job loss, medical bills and helping out dependents as the biggest reasons for the increased debt that older Americans are carrying.
According to the survey, "older households" carried a credit balance of $8,278 in 2012, whereas younger households (where the average age is below 50) carried $6,258 - a full $2,000 less. Good news for younger consumers, right? Not so fast.
TIME reported last week that young adults aged 18-24 are racking up credit debt faster than previous generations, and they're taking their time to pay that credit debt off. So how much are young consumers spending?
According to the story, 1 in 5 in that age category are spending more than their earned income by $100 every month. Seriously - every month! That's a pretty troubling trend that probably speaks to several different factors; a more expensive cost of living, underemployment, and the swipe now, pay later mentality that looked to be temporarily put on pause in the post-Great Recession "Occupy" era.
So if these trends keep up, there's a serious concern that this generation's consumers (today's young adults) will be in even worse shape than the elderly consumers of today. Basically, credit debt is just going up Up UP with no sign of slowing, especially if young consumers continue to pay back their debt at a snails pace.
That said, there has been some good news over the last few months in regards to delinquent payments dropping - they were at an 18-year-low in 2012. And there's a real probability that the average consumer is a lot more conscious of the perils of credit card debt in the post-Recession era.
If any of these numbers are hitting especially close to home, then it might be time to consider DIY debt management and credit repair. Sign up as a member of our Credit Talk Forum and post your debt management queries to junior and senior members alike to get the ball rolling on paying down your debt.
