There appears to be a generational gap in dealing with debt that is disproportionately affecting younger people in the United States.
The nuances and idiosyncrasies of collecting from individuals in different generations has been something that has been addressed on multiple fronts on this website in the past, and that understanding is only going to become more important if younger individuals continue to accumulate more debt.
For the 6% of individuals who have taken out a payday loan in the past five years, most of those people are between the ages of 18 and 24, according to a published report. An even high percentage of younger Americans has considered taking out a payday loan.
Younger people’s interest in payday loans could be due to a number of reasons. Millennials make, on average, 43% less than what members of Generation X made 20 years ago, and the amount of student loan debt continues to explode. One-third of all individuals between the ages of 25 and 34 has some form of student loan debt today and the stress of covering basic necessities like food and shelter are only getting more difficult. For the first time ever, individuals who graduate college with student loan debt have a negative net wealth, according to the report.
Millennials, which represent the biggest generation in the United States, own just 3% of the country’s wealth, compared with Baby Boomers, who owned 21% at the same point in their lives, according to data from the Federal Reserve.
The industry has taken note of the changes in communication patterns from younger individuals. It is just important to take note of changes in financial patterns as well. This information will be helpful when collectors are on the phone with individuals as well as when strategizing and even when purchasing portfolios of debt.
