Study finds 18-27yos feel good about CC debt?

[midjd]

I saw a couple of blurbs about this in Google News today... I guess I can see how having bills/debt would make you feel more "adult" (though I don't agree), but I thought it was a little alarming that those in the lowest SE class gained the most self-esteem from carrying debt...

While many Americans know that taking steps to cut credit card debt is a good way to successfully avoid bankruptcy, a new study has found that young adults who owe money to lenders generally have higher self-esteem.

Consumers between the ages of 18 and 27 who carry credit card debt and student loans generally feel more empowered because of the perception that they're in control of their own lives, according to a new study from the Ohio State University. This was particularly true of those who belong to the lowest economic class.

"Debt can be a good thing for young people - it can help them achieve goals that they couldn't otherwise, like a college education," said Rachel Dwyer, lead author of the study and assistant professor of sociology at OSU.

However, those between 28 and 34 began to feel burdened by those debts, the report said.

Older consumers who are interested in taking steps to reduce debt may benefit from closely examining their finances to determine the best method for successfully cutting into their outstanding balances.

[zibazinski]

My DD is about 3k in cc debt, pretty much maxed out her cards. Mostly on crap of course. She is gone for 10 weeks and cannot access her cards and there's nothing to buy anyway. She gets paid for these 10 weeks and I am going to try to get her out of cc debt as much as possible. She will probably just run them back up again but that is not my problem. She's 22. Wish cc companies would not give kids cards until they had full-time jobs.

[Sum Dum Gai]

That study sounds hinky. I wouldn't lump student loan and credit card debt together. Our entire society views student loan debt pretty positively, even most financial experts call it good debt.

[NomoreDramaQ1015]

This was particularly true of those who belong to the lowest economic class.

"Debt can be a good thing for young people - it can help them achieve goals that they couldn't otherwise, like a college education," said Rachel Dwyer, lead author of the study and assistant professor of sociology at OSU.

Student loans are a tool and this is what they are supposed to be used for.

No you don't spend $100k in loans getting a degree in underwater basket weaving, but I consider my student loan debt well worth it.

I pay it back dilligently and would like to be out from under it someday, but I certainly don't hate it. It's a tool I used to meet a desired goal.

Quite different from racking up credit card debt on crap.

Even credit cards I've used to my advantage during a 0% interest offers as long as I can afford to pay it off before the offer ends.

Debt doesn't have to automatically equal BAD. Look at Phil.

[8 Bit WWBG]

...:::"Consumers between the ages of 18 and 27 who carry credit card debt and student loans generally feel more empowered because of the perception that they're in control of their own lives....... However, those between 28 and 34 began to feel burdened by those debts, the report said.":::...

Isn't it amazing how "young 20s" self can screw things up royally for "young 30s self".

[formerexpat]

She's 22. Wish cc companies would not give kids cards until they had full-time jobs.

She's 22!! She's not a kid.

She's presumably got income, just not enough to support the lifestyle she wants to live...sounds like most of our population.

We shouldn't expect companies to safeguard against a persons stupidity...nor the government.

She gets paid for these 10 weeks and I am going to try to get her out of cc debt as much as possible. She will probably just run them back up again but that is not my problem.

It's not your problem to begin with. Cut the cord - she's 22.

[tskeeter]

I wonder how extensively the authors studied why young adults feel good about CC debt. Is it consumerism? If I have credit, I can live a lifestyle that I can't really afford? Is it that access to credit makes them feel like they are adults, with adult responsibilities and decision capability? Is it that they believe that they are building a credit history that will serve them well in the future? Is it that they are leveraging their credit resources to accomplish long term goals (I would live on credit cards when I was in school, then pay the credit cards off as I worked over the summer.).

I think the answer to why young adults feel good about credit card debt is more important than the fact that they feel good about the debt. I felt good about investing in a college education, even when I had to use credit to pay the monthly bills.

[❤ mollymouser ❤]

Jun 7, 2011 15:55:11 GMT -5 8 Bit WWBG said:

...:::"Consumers between the ages of 18 and 27 who carry credit card debt and student loans generally feel more empowered because of the perception that they're in control of their own lives....... However, those between 28 and 34 began to feel burdened by those debts, the report said.":::...

Isn't it amazing how "young 20s" self can screw things up royally for "young 30s self".

yup

[midjd]

Yeah, I also had a problem with them lumping SL debt and CC debt together... Having $30K in SL debt at age 22 is very different from having $30K in CC debt at age 22.

I'm right on the cusp of the two groups studied, so I found it interesting. I would say that - if it is CC debt and not SL debt giving the happy feelings - part of it is consumerism and part is the "adult" feeling of having bills to pay. Plus I think having CC debt is seen as typical among young adults... so identifying with one's peer group might be part of it as well.

Isn't it amazing how "young 20s" self can screw things up royally for "young 30s self".

[Mad Dawg Wiccan]

I wish those pre-approved cards would be banned. My clients are developmentally disabled, and don't realize what a crappy deal they are. They then max out the card and blame me when they don't have enough money to pay the bill.

[Deleted]

It is a correlational study, not causal. All it is saying is those in that age group who have cc debt have higher self-esteem, based on whatever measure they used, than those without the debt. The self-esteem could be, and probably is caused by something else, such as having a nice car and looking well off.

[Deleted]

From age 20-26 I had CC debt. It was never very high (in the hundreds in college) and peaked around $1800 in 1999. I had an automotive related hobby back then and using the credit to buy parts resulted in many memorable times. The debt was not so high that it offset the happiness I felt.

[Deleted]

I can confirm the part about feeling burdened between 28 and 34.

[zibazinski]

These cards were given to her when she was 18 and not self supporting. She is 22 and still not self supporting. Credit cards should not be issued to anyone who has no means of support, like a damn JOB!!!

[haapai]

My credit card debt didn't bother me until I figured out what it would take to pay it off. The required minimum payments are designed to be untroublesome. You can charge $100 and pay twenty-something for many, many months before having to juggle things in order to make that minimum payment.

And then the shit hits the fan. The day that you realize that you have to cut expenditures by roughly $90 a month (just to keep the balance from growing) and start paying double or triple the minimum payment (to make a dent in the balance) really, really stinks!

I fell into that trap. All of the terms and conditions had been disclosed to me in pretty clear terms. I knew that the interest rate was ridiculous. I knew how the minimum payments were set at deliberately low rates. I have numerous math prizes in my background and I still fell for it.

Even after figuring out what kind of hole I had dug for myself, I wasn't too worried. I hated myself for falling into that hole, but once I figured out what a fool I had been, the way out was pretty obvious too. It's a strange thing about 12% debt. It's a crazy rate to pay, but paying it off also feels pretty good. Passbook savings rates were about .5% APR when I was paying off credit card debt, so even paying off felt pretty good too.

The ROI and risk-reduction that I got from paying off credit card debt is hard to match. I actually got mildly bummed when the card was paid off and I had to start saving an EF in a savings account that paid 1 to 3 percent APR.

[Deleted]

Jun 7, 2011 20:47:07 GMT -5 @craftysarah said:

I can confirm the part about feeling burdened between 28 and 34.

I guess I am an over achiever... I started feeling burden at 25

[8 Bit WWBG]

...:::"The day that you realize that you have to cut expenditures by roughly $90 a month (just to keep the balance from growing) and start paying double or triple the minimum payment (to make a dent in the balance) really, really stinks!":::...

Damn straight. I tried to explain this to DF over and over and over again. But when the numbers are "just theoretical" and "in the future", its much harder for a "present" to get worried about it.

But once it began to impact cash flow, and delayed things we wanted, then she really started to grasp the reality of the situation. It takes that pain to cause change.

[zibazinski]

Well, I'm using her money to pay off her cc's and if she runs them up again, oh, well. She can't access any shopping to spend anything so this cold turkey should work.

[strider]

I graduated with $10k in student loan debt. Yes I feel empowered but it's because it enabled me to get a decent well paying job that I wouldn't have otherwise.

[cronewitch]

These cards were given to her when she was 18 and not self supporting. She is 22 and still not self supporting. Credit cards should not be issued to anyone who has no means of support, like a damn JOB!!!

Parents will bail the kids out often enough that credit cards make a profit loaning to them. At any adult age the borrower should be allowed to sink or swim on their own. Then the credit card companies will quit loaning them money. The borrower knows they can't afford debt but trust that somehow it will be ok and then parents pay it off to prove it will be ok.

Why are you treating your 22 year old adult like a child? She has the money to pay her debts, why not let her handle her own money? She should be self supporting at her age unless she is a full time student or has issues of some kind.

[cronewitch]

Several things make a young adult feel like they aren't children anymore. Having a key ring with more than 2-3 keys, getting mail even if it is bills, paying rent, utilities and for your own medical care, buying your own clothing and shoes because you need them not because they are cute.

For me I wanted my parents to allow me to pay for things like dinner and gas if we traveled together. Also when I could afford to buy them more expensive gifts than they bought me. As a young adult I might spend $3 on them when they spent $100 on me, but I couldn't afford more.

I can see how getting credit card bills and paying them makes young people feel grown even if they don't like paying the bills.

[lynnerself]

Credit cards should not be issued to anyone who has no means of support, like a damn JOB!!!

I don't totally agree with this. My kids got "student" credit cards in college with low limits. They used them mostly for convenience when shopping on line or buying something we were reimbursing them for later (like books).
It helped them start establishing credit.
But once they had them, it was up to them to make sure they were paid on time and never over extended, I never once knew how much they owed or when their payment was due.
I guess we taught them well because they always pay if off every month.
Neither of them would think that having debt was more adult than paying it off. Just the opposite.

[zibazinski]

She is a full-time college student. She, like her brother, got a card for emergencies. I wised up with him. Got him one thru B of A with a 500 limit on it. BEHIND my back they raised his limit to 2k so guess what he owed by the time he graduated college? 2K. All the nice graduation money went to pay off his card not to buy a working guy's wardrobe. She was joint on my card so I could monitor the spending. All that did was give credit card companies the idea that she was fair game and they were so right. When she lived at home, I threw away all the cc offers but she moved to campus and guess what? Lots of cards coming her way. B of A was right in there with a 2K credit limit and USAA with a 1k credit limit and lets not forget all the store credit cards like Express where they actually charge you to pay online so you have to go into the store (and see cute stuff) to make a payment. Unreal and she is JUST LIKE HER FATHER. Instant gratification because I "deserve" it. He's a financial train wreck and somehow she got that gene. I hope she marries a really rich man.

[jkscott]

I hated debt since the day I learned what interest was.

Borrower is slave to the lender.

[Deleted]

zib - I'd let your daughter pay off her credit cards. It's meant to be painful. One of the best things that happened to me was getting into 2k of credit card debt in my early 20's. It took me so long to pay it off at my insane interest rates that I learned a valuable lesson - one that's better to learn with 2k of credit card debt than 5 or 10k.

[midjd]

Gotta agree with Anne on this one. My brother is 21, and IMO he'd be much better off in the long run if my mom quit bailing him out. He doesn't do much thinking about the consequences of his actions because he knows she'll take care of it. It is tempting to not want your kids to dig themselves a hole, but sometimes it's necessary...

[zibazinski]

I'm not bailing her out. I am paying her bills while she is away-with her money from the military. She isn't going to have a dime when she gets home but she should be out of debt.