Without Personal Finance Know-How, Today’s Young Adults Are Getting into Trouble with Credit Card Debt
The finances of young Americans have been thrust into the spotlight recently, thanks to growing concerns over the nation's skyrocketing student debt load.
But many college students face an additional financial problem, say bankruptcy attorneys.
In 2008, most graduates left college with at least one credit card and $4,100 in credit card debt. With the cost of tuition rapidly increasing each year, it can be surmised that today's graduates shoulder even larger debt burdens.
Now combine that credit card debt with the $25,000 in college loans the average student graduated with in 2011 - not to mention the fact that entry-level jobs are harder to come by these days.
According to The Wall Street Journal, a recent study showed college students with the least amount of financial knowledge are two times more likely to max out their credit cards than a more financially-enlightened student.
In addition, they are more apt to make late payments and take cash advances - both behaviors that put them at risk for long-term financial problems.
With such a heavy burden, more and more young adults are putting off borrowing money for homes and cars, purchases that have traditionally stimulated the economy.
The good news is that, while students are stuck with student loan debt, credit card debt can be managed - and even avoided.
By helping young adults learn responsible money management skills, high schools, colleges and (maybe most importantly) parents can pave the way for a brighter financial future.
Young adults with a high amount of personal finance knowledge are much less likely to engage in risky credit behaviors like blasting through their credit limit and missing payments.
As for existing credit card debt, bankruptcy may be the smartest solution. Depending on their income level, college students may be eligible for Chapter 7 bankruptcy.
Chapter 7 is the fastest and easiest way for young adults to get rid of crippling unsecured debts, such as credit card debt and medical bills. Those who qualify can often eliminate debts completely.
For those ineligible for Chapter 7, Chapter 13 bankruptcy provides a way to reorganize debt, offering precious financial relief.
Graduating from college should provide a head start, not a burden. The right bankruptcy plan can help.
To find out if bankruptcy is the answer to your financial troubles, contact the DebtStoppers Bankruptcy Law Firm at 800-440-7235. Call us today for a complimentary one-on-one debt analysis with one of our professional bankruptcy attorneys.
More Blog Entries:
As Student Debt Bubble Grows, Lawmakers May Have to Rethink Requirements for Discharging School Loans: September 2, 2012
Younger Borrowers Make Up Majority of Underwater Homeowners: August 28, 2012
Additional Resources:
Beware College Students Carrying Credit Cards, by Ruth Mantell, The Wall Street Journal