WASHINGTON—One in five adults between 18 and 24 with a credit file in the U.S. currently have debt in collections, a new report shows.
In addition, the Urban Institute, which complied the data, found it is young adults are particularly vulnerable to credit card, auto loan and retail delinquencies compared with older adults.
“Where 5% of Millennials and 4.5% of Gen Z consumers have credit card debt that is more than 60 days delinquent, just 3.5% of Gen X borrowers and 1.8% of Boomers are behind on payments like that,” PYMNTS stated in its analysis of the report.
“There are some indications, per PYMNTS' own research, that the debt load has accumulated in recent weeks, particularly for paycheck-to-paycheck consumers,” PYMNTS stated. “During the most recent holiday shopping data, kicking off with Black Friday, 45 percent of paycheck-to-paycheck consumers leaned heavily on credit and financing to get Black Friday deals, paying for nearly 60 percent of their purchases in these ways. And we found that Millennials relied more than any group on financing, with 45% of this cohort reporting use of credit, personal loans and buy now, pay later (BNPL) options to finance 51% of purchases.”
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