Although my husband and I do all that we can to avoid debt, we still owe the exact median amount of debt for Generation X households. According to a recent Census Bureau report cited in a USA Today article, people who are 35 to 44 had the biggest increase in debt. The Census Bureau looked at the percentage of U.S. households carrying debt in 2011 compared to 2000. People in my age category owed a median of $108,000. Our debt is made up of a $100,000 mortgage balance as well as $8,000 car loan.
Cutting up the cards
Although I had a problem with credit cards in my 20s, I've avoided credit card debt in my 30s. According to the report, fewer Americans have credit card debt now compared to about 10 years ago. Thirty-eight percent have credit card debt now compared to 51 percent in 2000. I actually paid off my last credit card bill in January of 2000.
Getting burned by interest charges
I think most people who have high-rate credit cards know it's extremely difficult to pay off a balance. I have friends who have given up. It's not surprising that people who owe debt are dealing with more debt now than ever before. The report shows the median debt loan in 2011 was 40 percent higher at $70,000 compared to about $50,000 in 2000. One of my Gen-X friends has high-interest rate credit cards as well as student loans that never seem to shrink.
Helping grandpa pay his charge card
It used to be grandparents retired with no mortgage. My grandparents never carried a credit card balance even though my grandmother loved her department store "charge cards." Government data shows seniors' debt loan has actually doubled in the last 10 years. The median owed by seniors is now $26,000. Although some experts claim retired people are taking on more debt to help adult children hit hard by the recession, I've noticed it go both ways. Gen-Xers are the new "sandwich generation," helping their elderly parents and children. One of my 40-year-old friends pays her father's credit cards every month. He refuses to sign-up for online bill pay.
Paying off good debt
I'm surprised that people in my generation don't owe more money. People who rent don't have as much so-called "good debt' or mortgage debt, which may lower the figures. Experts used to say student loan debt was good debt because it helped a person secure a lucrative career. However, since the recession too many people have been saddled with huge loans and few job prospects. My husband and I try to pay down our mortgage. We didn't co-sign any student loans. Our sons have paid cash for college instead of taking out loans. Still, we still have more to do to become completely debt free by the time we retire.
When it comes to the debt carried by members of Generation X, there is a big difference between credit card and mortgage debt. Even though I don't consider any debt to be good debt, I would rather have a mortgage with a low interest rate than high interest credit cards. Judging from the Census numbers that show Americans have less credit card debt now compared to 10 years ago, I think the majority of people share my view. My hope is that my son's generation also avoids credit cards even if their grandparents are maxed out to the limit.
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