Bankruptcy and millennials — it’s not just about student loans

On Behalf of | Feb 5, 2020 | Bankruptcy

For millennials, it might just feel as if there are opportunities for new credit cards around every corner. This is unfortunately not that far off from reality, so adults regularly use credit cards for making large and even everyday purchases. But credit card debt can spiral out of control much more quickly than most people realize. By the time someone realizes the situation has gotten out of control, bankruptcy could be the best option.

Credit card companies try to draw in millennials a couple different ways. One example is mailing out applications to Connecticut residents that do not exactly paint a full picture, like just how high interest rates get when introductory rates expire. Interest rates of as much as 25% are not that uncommon. Even when that information is out there, these companies often pile on incentives to encourage spending.

All that incentivized spending has landed millennials in a pit of credit card debt. Northwestern Mutual conducted a 2019 study in which it found that this is the largest debt source for 25% of this generation. One of the reasons some of these young adults might be struggling? Of the millennials who have balances on their credit cards, 20% have no idea what their interest rates are.

Everyone makes poorly informed decisions from time to time, but some of those decisions have larger financial implications than others. Getting into credit card debt is just one example, but it is a profoundly difficult situation to be in. As a revolving debt with exceptionally high interest rates, many people in Connecticut struggle to pay off their balances. Some of these individuals ultimately turn toward bankruptcy to discharge these and other unsecured debts.