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article imageOp-Ed: Credit card debt — As bleak as they say it is for young adults?

By Jason Bushey     May 31, 2013 in Business
San Diego - According to a recent survey, young adults are carrying more credit card debt and taking longer to pay it back. Why so much debt, and what's the solution to paying it down?
A lot has been made of late about the Ohio State University's study released earlier this year painting a pretty bleak picture when it came to young adults and debt. According to the study - which was released to the public in January of this year - the average American consumer that carries a balance "will die in debt to credit card companies".
Those are the words of Lucia Dunn, an Ohio State economics professor and co-author of the study, and the numbers she helped come up with (along with Sarah Jiang) back up that claim. According to the study, adults born between 1980 and 1984 are likely to carry close to $5,700 in debt more than the generation before them at the same time point in their lives.
That's not the only bothersome statistic out there. According to Nerd Wallet, the average credit card debt per American household in 2012 stood at $7,073; however, if you took the statistics of only the households that carry credit card debt, then you would find that those households carried a staggering $15,162 per household.
OK, so Americans are carrying a ton of debt on average right now. And unfortunately, that pattern is likely to repeat themselves as Dunn and Jiang's study suggests. And yet, there's also a somewhat healthy skepticism about credit cards forming among young consumers, those even younger than the aforementioned study surveyed.
According to a Sallie Mae and Ipsos Public Affairs survey reported on by Bloomberg's Jeanna Smialek, 18 to 24-year-olds in 2012 were 10 percent less likely to own a credit card compared to just two years prior in 2010, when 49 percent of consumers in that age group carried a credit card. The Los Angeles Times also reported this month that credit card use was "down" among millennials, citing a National Foundation for Credit Counseling Survey explaining that young adults were less likely to use a credit card for their everyday purchases than older generations of consumers.
With so much conflicting data available, it's hard to say for sure even what the problem is, let alone how to fix it. But to summarize, even though thrift has become the preferred way to live for many 20-somethings, credit card debt is still a thing and, if the slow pay-down rate persists, credit card debt could be a lifetime monkey on the backs of many American consumers.
So what are some solutions to this problem of carrying a high credit card balance?
The first is highlighted in the aforementioned Ohio State University survey, which explained that raising the minimum monthly payment goes a long way towards paying down debt quicker. Oddly, the study suggests that consumers whose minimum payments had been raised would actually end up paying even more than the minimum payment due. Dunn told Researchnews.OSU that consumers "might see an increase int heir minimum payment and start feeling uncertain about their future ability to pay off their debt" as one possible explanation.
Another way young adults can pay down debt faster is by transferring their existing balance to a credit card that charges no interest on balances transferred for up to 18 months. Balance transfers often require a small fee - usually 3 percent of the total balance being transferred - but give consumers the opportunity to pay down debt interest-free over an extended period of time. And as USA Today reported earlier this month, zero percent credit card deals may be becoming more abundant as credit card companies show a growing confidence in the economy.
That said, it's important for young (and old) consumers to match themselves up with the right kind of card before applying for just any card. Online credit card reviews websites like and Credit Karma ask users specifically if they're interested in transferring a balance when researching cards via their card-matching tools, and as debts have risen so has the demand for these zero percent offers.
For indebted young consumers uninterested in opening up a new card to pay down an old debt, there is one more solution to paying down debt quicker: simply ask for a lower rate.
It's simpler than the average young adult might expect, and US News' step-by-step how-to explains the Do's and Don't's of asking for a realistic lowered rate to help pay down debt quicker.
There are signs that young adults are coming around to getting serious about paying down their debt. Delinquency rates on credit cards issued by banks are at an 18-year low, and the concern about credit cards in general by young adults show that they're conscious and mindful of the mistakes made by those before them (even those born right before them, i.e. the 1980-'84 babies surveyed by Ohio State).
But in order to pay down debt sooner rather than later, it's going to take more than a healthy skepticism ; going debt free takes action and, in many cases, some serious discipline for young adults hoping to pay their credit debt down to zero.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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