It may not surprise you, but there are more teens struggling with debt today than in the past. In fact, just between 1992 and the early 2000s, the number of teens who took on debt had risen by over 100 percent. Not all of this debt is credit debt; some may be related to college loans or car loans. The point is that it’s more common to see that teens and adults between 18 and 24 have found themselves already in a pile of debt.
A study looking into the rise in teen debt noticed that credit companies sometimes marketed aggressively to teens throughout the 90s and 2000s. They used incentives and marketing campaigns to lure teens and young adults into getting credit cards. In 2016, anyone who is 18 can qualify for a credit card and loan. These first-time borrowers are prime targets. Many don’t understand what interest rates will affect them or which card features they should use. The cards they choose make as much a difference in their success as anything else.
On top of this, many teens have low-paying jobs and work only part-time, according to a 2016 article. Despite this, teens take on the credit cards. Why? You need credit to buy a home, to rent an apartment or even to obtain a job. Unfortunately, if teens don’t understand the impact of credit on their credit scores, they can be in for a surprise when they can’t qualify for any of these. Having a bill in collections could disqualify you from getting an apartment, or having poor credit might make an employer concerned about your work ethic.
In any case, teens and young adults can find themselves in over their heads, but there are ways to get out of debt. An attorney can help with bankruptcy or debt reduction negotiations.
Source: Parent Map, “More teens dealing with debt,” Jolene Gensheimer, accessed Feb. 10, 2017