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Are the young in debt too deep?

By Judy Martel ·
Wednesday, January 16, 2013
Posted: 5 pm ET

Americans in their late 20s and early 30s are in bigger debt than their parents and grandparents, according to a new study.

The research, from The Ohio State University, indicates that Americans born between 1980 and 1984 carry an average of $5,689 more debt than their parents did at the same age and $8,156 more than their grandparents.

Not only do younger people owe more money, they are slow in paying it off, leaving them at risk of dying in debt. The study, which was published in the Economic Inquiry journal, concludes that the reason younger people are in over their heads is that credit is easier to obtain and debt has less of a stigma than it did in the past.

"It's not really surprising to me that the young people have more debt than their parents and grandparents," says Linda Sherry, director of national priorities at Consumer Action. "In their grandparents' day, revolving credit wasn't really available as it is today, and even in their parents' time, (credit) cards were not as available."

Carrying long-term credit card debt is serious and dangerous, says Sherry, adding that younger people sometimes have more revolving debt than older cardholders because they have less income. Once they get a job that pays more, she says, they may want to pay off the cards.

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January 17, 2013 at 5:06 pm

I've always adhered to simple mathematics. Income should exceed expenses. That may mean sacrifice. It wasn't easy years ago and certainly isn't any easier now. Just conventional wisdom.

roger miller
January 17, 2013 at 3:40 pm

Well If the amount of money is not adjusted for inflation I would say the study is useless. I finished school in 1983 and a dollar of debt then would need to be double that now to be equivalent. Then take into account the difference in interest rates people were paying in the late 1970's and eary 1980's I think a good case can be made that debt was far more crippling back then.

January 17, 2013 at 3:28 pm

It's not credit cards it's college loans just like TC Alan said! How do you ever get out from under $60,000 in loans when the degree doesn't get you the job to pay them off?

TC Alan
January 17, 2013 at 3:14 pm

There are only a FEW ways to make $$$. Prostitue - sell drugs - looks or talent, or go to school. Most fall into the "go to school" category. The debt issue is then school is from $40,000 and up. 95% of those people need school loans. They graduate with a higher degree and unless they are hand delivered a $100k+ a year job, they graduate being almost $50k in debt to start. It's hard to live outside your means being that far in debt, and you are only 25...

January 17, 2013 at 3:03 pm

Debt, well what can I say but people tend to be right with younger kids want more out of life . But , in my circumstance , there is never a good enough gameplan available. It is said to us that we should have a emergency fund of 3-4 months but the truth is no real family has that . Things always tend to happen you can never account for. Most Americians today live paycheck to paycheck . You just do your best to maintain what you got. I recently had a child and just the hospital bills alone can really cramp the pocket on a monthly basis. Then you add diapers, formula, wipes , etc it just adds up quickly. When we go for a trip to Target we tend to drop 140.00 just on these things. Nothing cheap or free but come on , sometimes a little break is nice.

I agree that credit is more available to us today that in the past. I guess it all depends on the particular situation . People with kids to support tend to struggle more to stay afloat then a single person.

Debt is something you learn from over time and work with on a daily basis. Being smart about your credit purchases is better then oh I want that now , just put on my card .

My two cents :)

January 17, 2013 at 2:58 pm

join the military...get education...and out of debt

January 17, 2013 at 2:56 pm

The worst thing about the accumulation of all the unsecured debt in the U.S. is that, without it, our economy would slow down even more than it has. Consumer purchases constitute a huge portion of our nation's GNP (and the rest of the world's, too). Whether it's paid for with cash or credit, it's counted on the books in the same way. That doesn't bode well for our future economic health. When your neighbor across the street (or you) gets to the inevitable point where they can no longer cover even minimum debt payments, the whole train runs off the tracks.

January 17, 2013 at 2:42 pm

The banks are the cause of this kids will be kids. This not how my kids learn to live.

January 17, 2013 at 2:26 pm


Barry Wilson
January 17, 2013 at 1:55 pm

To: Guest-- Your sister is a role model, not only for today's youth, but older people too!!