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Is the next generation adverse to credit card debt?

According to a recent study, people across the U.S., including Massachusetts, who are under 30 are considerably less likely to carry any credit card debt than they were just eight years ago, prior to the Great Recession. Currently, 16 percent of all people 18 to 29 do not own a credit card; while this trend holds true for other age groups as well, it is not as marked. The average debt that this age group is carrying in credit cards is $2,087, down almost $1,000 from 2008.

While some attribute this trend to the enactment of the CARD Act, which made it harder for people in their late teens to get a credit card, others say that like the Great Depression of the 1930s, the recent Great Recession has definitely and perhaps permanently changed the attitude of the generation that felt the brunt of its force. At least for now, youth are simply more reluctant to use credit cards because they are not sure whether they will be able to pay the credit card bills.

It is not clear whether this generation of young people places as much importance on a credit score, but the fact remains that credit cards do help people build their credit so that as they move on in life, they can borrow for big ticket items like a house or a car. For the moment, however, the most interesting question is whether young people have actually slowed their spending habits or whether they are simply finding some other source of funds with which to provide for themselves.

After all, money must come from somewhere if not from a traditional credit card. Fortunately, however, a bankruptcy filing can help young people who made serious financial mistakes early in life to get a fresh financial start by relieving them from a variety of debt.

Source: The New York Times, "More Young People Ditching Credit Cards," Ann Carrns, June 20, 2013