Millennials are more in debt than any other generation

Americans have a total debt of $16.9 trillion, and this financial burden is especially hard on older millennials, the new government data shows.

People aged 30 to 38 account for nearly $4 trillion in total US household debt. For millennials, that’s a 27% increase in debt over 2019 — a steeper jump than any other generation, Yahoo Finance reporter Akiko Fujita told CBS News.

According to Fujita, millennials are accumulating debt due to skyrocketing inflation. Consumer prices have risen sharply over the past year, especially for gasoline, child care and food.

“You also have [Federal Reserve] increasing interest rates at a very rapid pace, which means higher rates for your credit card [and] your car payments,” she said.

The rapid economic recovery from the pandemic, coupled with rising inflation, has prompted the Federal Reserve to hike its benchmark interest rate sharply to curb prices and slow wage growth. The aggressive tightening of the central bank’s monetary policy has raised the cost of borrowing.

For example, a record proportion of Americans are paying more than $1,000 a month for their car now that car loan rates are over 6% for new and used cars. The average US credit card rate is now 20.3%, up from 17.9% six months ago. according to at creditcards.com.

MoneyWatch: How to reduce credit card debt 03:31

Fujita said there are a number of ways millennials can start paying off their debt, including through tax refunds to reduce their balance sheet. Another option is to consolidate these debts by taking out a personal loan, using the funds to pay off credit card balances, and then paying off one loan.

Fujita also recommended calling your credit card issuer and simply asking for a lower interest rate.

“Of course you can’t bring it down to 0, but you can bring it down from what it is now at about 20% per annum,” she said.

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