Younger Americans are less inclined to take on debt these days, especially credit card debt.
According to a recent consumer analysis from FICO, 16 percent of Americans aged 18 to 29 had no credit cards. In 2005, this number was only 9 percent. Young Americans have also reduced their credit card debt from an average of $3,073 in 2007 to $2,087 in October 2012.
This age group has reduced total debt in nearly every other category as well, though not as dramatically as credit card debt.
The only category that has increased over the past five years is student loans. The average young American had $6,500 of student loans in 2007. Today, they have $11,500.
This trend is likely the result of a couple factors.
Frederic Huynh, a senior principal research scientist at FICO, said the Credit Card Accountability Responsibility and Disclosure Act played a big role, as this bill makes it much harder to Americans younger than 21 to get a credit card.
This is having an impact across all consumers as Americans of all ages take on less credit card debt, though young Americans have made the biggest reduction.
Finally, young consumers prefer to live in metropolitan areas so they are less likely to take out car or home loans. This information from FICO paints an interesting picture of the changing attitude toward debt in society today.
Source: bucks.blogs.nytimes.com. Photo source: susanh.com.
Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.