Credit card issuers will be encouraged by the latest data from The New York Fed. Credit card use, after many years of slowdown after the financial crisis of 2008, is now exploding. But dig deeper into the numbers and you’ll find cause for concern. Among the Millennial generation, the level of credit card debt is at its lowest level since 1989, when data collection began. This age group is also saving at a higher rate than their older siblings and parents.
There are plenty of reasons for Millennials to avoid credit cards, including historic levels of student loan debt. Also at play is the exclusion of Millennials from traditional financing because of their existing debt and insufficient incomes. However, as they age, pay off loans and take advantage of real-time digital payment services linked to their bank accounts, Millennials may again qualify for mortgages and other credit. This generation’s credit habits in the next five years could determine mainstream financing channels.
Here are the data:
$17,200 | The average amount of student debt held by Americans under the age of 35
182% | The percentage increase in the average student’s debt since 1995
62% | The percentage of adults aged 18 to 29 who save at least five percent of their income, according to Bankrate. Only half of that percentage of adults aged 30 and older save at the same rate.
Advertisement: Scroll to Continue
50% | The percentage of adults over 55 who have no retirement savings
37% | The percentage of American households headed by someone 35 and under that held credit card debt as of 2013 (the most recent year data is available) according to the Federal Reserve’s Survey of Consumer Finances
