People under 40 took on more credit card debt during pandemic

by | Sep 30, 2021 | Bankruptcy

Have younger adults faced the biggest financial hit related to the pandemic? A recent survey seems to support this notion. We already know that roughly half of Americans have credit card debt. A new survey from Bankrate disclosed that more than 40% of these people have more debt now compared with when the COVID-19 pandemic began.

And younger adults comprise a good portion of this group. The survey noted more than half of the people age 40 and under had more credit card debt than they had 18 months ago. However, people older than 40 are much less likely to have accumulated additional credit card debt during that same period. As stimulus checks ceased and expanded unemployment ended, many people relied on credit cards to feed their families and pay the bills.

Service industry workers feel the brunt

Experts speculate that the likely reasons for this development include younger adults likely had less money in savings, earned lower salaries, were strapped by student debt and worked in the service industry.

The latter may have played the biggest factor as restaurant, hotel and retail workers were among the people most likely to lose their jobs as well as income during the pandemic. And many within the service industry – especially restaurant workers – had a more difficult time securing unemployment benefits.

Who files for bankruptcy?

In some situations, bankruptcy is an option. But who files for bankruptcy? Here are certain findings, some of which spotlight younger adults:

  • More than 64% were married.
  • The median age for filing for bankruptcy was 45.
  • People ages 34 and younger comprise 19% of the people who filed for bankruptcy.
  • Roughly 60% annually earned $30,000 or less.
  • Nearly 10% annually earned $60,000 or more.
  • Education-wise: 36% earned a high school degree; 29% attended some college; and 20% earned a bachelor’s degree or higher.
  • Women made up the majority of bankruptcy filers (52%), but only slightly more compared with men (48%).

Some people may be able to overcome credit card debt with a little bit of discipline. However, in these recent and uncertain economic times, others – including those 40 years old and under – may see no other option than to file for bankruptcy. It is a necessary move and a good one that will erase most of your debt and allow you to carry on.