Since the end of the recession, consumers of all ages have made significant progress in trying to get out from under the debts they held for long periods of time, but none have been more successful in this regard than those between the ages of 18 and 29 years old.
Some of our readers may have missed our post from September 2012 in which we showed that far from being used for their generally accepted purpose, student loans - now well over $1 trillion and more than the total credit card debt outstanding - in numerous instances are instead abused to fund virtually everything else besides paying for tuition. Recall: "Robert Thomas Price Jr. borrowed about $105,000 for his tuition at Harrisburg Area Community College from 2005 and 2007, federal authorities say.
When Deacon Hayes and his wife Kim sat down to discuss their finances, the newlyweds discovered they had $52,000 in debt, including $18,000 in car loans, $27,000 in students loans, and $7,000 in outstanding credit card balances.
By Rishi Mehra Debt consolidation happens when multiple loan and debts are clubbed to arrive at the total figure a borrower owes to different banks or credit cards. It is normal for someone to have different types of loans today - personal, car, and education among others. Similarly, one may tend to accumulate unpaid balances on multiple credit cards and it may struggle to pay it off completely. Debt consolidation will allow the borrower to avail of a fresh loan that will allow him to pay off all smaller loans and unpaid amounts on credit cards.
On one hand, we’re finally getting smart about this whole money-management thing. Consumers have built up savings from the pre-recession years, and are more likely to pay credit card bills on time. A lot of younger Americans are avoiding the credit card debt trap entirely. But experts say these efforts still aren’t enough: The economic current is running against us, so even those who are swimming like they were taught are probably just treading water. Collective consumer debt was cut by $100 billion in the first quarter of 2013, according to the credit reporting agency Equifax.