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Credit card debt down among those under 30

Credit cards are double-edged swords. They can help you make ends meet as well as get things you want but don't quite have the money to pay for outright. When their balances are kept low and paid off quickly, they pose no problem for most users. But they also come with a risk. Their balances are easy to run up, meaning it's easy to put more on them than you plan. And their payments can be hard to make if something unexpected. When that occurs, things can spiral out of control easily.

That's a lesson that many young Americans, some of them here in New Jersey, have apparently taken to heart. In 2007, only 8 percent of those under the age of 30 didn't have any credit card debt to their name. In 2012, that number had doubled with most of them opting for a debit or a prepaid card instead of a credit card.

The reasons for the decrease in credit card usage among the group are probably as varied as the number of people there are in it, but they almost certainly include two factors: observation and federal restraints. In other words, many observed their parents struggle to deal with their credit card debt when the recent recession hit and decided not to run the same risk. Others have been prevented from taking out a card by the CARD Act of 2010, which requires applicants younger than 21 to either have a high enough income to cover the payments or have someone co-sign for them.

Whatever the reason behind their decision, many have been rewarded for it with good credit scores -- something they wouldn't have had otherwise. But that may not always be the case for them. As they leave college and begin to take on the responsibilities that come with families and home ownership, some of them will eventually face financial struggles and unpleasant decisions. If and when that happens, an experienced bankruptcy attorney may be able to help determine what options for obtaining debt relief are best.

Source: CNN Money, "Young Americans are ditching credit cards," Blake Ellis, June 14, 2013

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