America is experiencing a major household debt crisis with a credit balance exceeding that of previous peaks as seen after the 2008 financial crisis, reports CNBC. The Federal Reserve Bank of New York found that U.S. households added US$26 billion in credit card debt in the last quarter of 2018.
Cracking under this economic pressure, millennials have also been falling behind and struggling to pay off their credit card bills. Young Americans are often associated to the burden they carry with student loans, but in 2018, credit cards are a much more common source of debt for America’s Millennials, an NBC News survey details.
Today, young Americans are at least 90 days behind on credit-card payments, reports Bloomberg. A lot of these credit card debts are contributed by their everyday expenses varying from basic necessities such as groceries or utilities where 1 in 4 millennials carry credit card debt for at least a year. Americans aged 18 to 29 accumulated credit card delinquencies of 90 days or greater, hitting an eight-year high as it surpassed 8% of balances in the first quarter of this year.
It’s a complex problem with solutions that can only resolve so much. “If you can’t avoid carrying a balance, look for a credit card that offers a low interest rate rather than racking up debt on a card that comes with fancy perks, but has a higher APR, Ted Rossman, a credit card analyst for CreditCards.com, tells CNBC Make It.
Then of course, there’s the more obvious alternative and that’s choosing to pay in cash.