Pennsylvanians will be at an immediate disadvantage when they graduate from college with substantial student loan debt. This can affect every decision they make from where to live, what job they should take, whether they should get married or not and more. Credit card debt is also a problem for many as they frequently need to use credit cards to purchase necessities when they are short on cash. This leads to a rising tide of debt. For those who think student loan debt is worse than credit card debt, new information is contradicting that narrative.
A recent study says that Millennials are increasingly having trouble with credit card debt and that might be surpassing student loans in terms of hindering their lives. The study says that 13 percent of Millennials who owe on their credit cards are paying the balance each month. The remainder are piling debt upon debt. Eventually, this can reach a critical mass where they are essentially spinning their wheels with nowhere to go. On average, the credit card debt is $5,700. Paying the minimum will do little to reduce that.
Although student loans are a big problem as well -- and generally cannot be discharged through bankruptcy -- it is perceived as the more pressing worry compared to credit cards. But, credit card debt is worsening. Only Generation X (Gen X) is in worse financial straits than Millennials. Eleven percent of Gen X pay their balance each month. Statistically, student loans are less of a concern for Millennials as only 36 percent have a student loan. And, 67 percent owe on credit cards. Those with children are in debt as 93 percent of those with a credit card and have children younger than 18 have some level of debt. High interest rates only make the financial struggle worse as it is more difficult to pay off what is owed.
People who are in credit card debt currently have more options to clear it than do those with student loan debt. While bankruptcy is ineffective with student loans, it is a viable way to clear credit card debt with a Chapter 7 liquidation or to create a reasonable payment plan through Chapter 13.