Consumerism is as American as apple pie, and for millions of Americans, so is credit card debt. While this type of debt is a common financial burden across generations, it’s generally discussed as the result of irresponsible and overly materialistic youthfulness. That reductive trope skips over a lot, namely that credit card companies have a history of taking advantage of young people who have little financial experience, so much so that federal regulations have been passed to curtail credit card companies’ more blatant and harmful practices.
Though student loan debt (and its possible cancellation) dominates much of the national conversation, data shows that credit card debt is also a major financial hurdle for many young people. The pandemic-driven economic tailspin of last year just made matters worse.
According to a 2019 poll of more than 2,500 millennials conducted by CreditCards.com, 23% of respondents say they’ve carried their credit card debt for at least a year and 11% say they’ve carried their debt for more than five years. The rate of credit card balances that were in “serious delinquency” — meaning payments were at least 90 days past due — for Americans between 18-29 years old hit an eight-year high in 2019, per a report released by the Federal Reserve Bank of New York. That same year, a poll from Morning Consult reported that 65% of millennials and 52% of Generation Z’ers with credit card debt said they experience some or a lot of stress about their debt. In yet another survey, 35% of those polled reported that their debt makes them feel guilty at least every month; roughly 20% report feeling physically ill at least once a month.
The pandemic brought an unexpected wave of shutdowns, layoffs, and business closures, forcing people who were already struggling to struggle even more — or to rely on solutions that will only add to their challenges in the future. Of those Americans who are already grappling with worse finances during the pandemic, 45% have taken on additional debt to make ends meet, according to a November 2020 Nerdwallet survey. Young people who Teen Vogue spoke with recently say looming credit card debt has become just another financial hurdle in a long list of economic concerns that stand in the way of planning for the future. Pop culture tropes may relegate credit card debt to the realm of overt wealth and flashy shopping sprees, but some of these young people share that they accrued debt paying for basics: medical bills, college tuition, groceries, and rent.
Below, five young people with outstanding credit card debt balances tell Teen Vogue how they accrued the debt, how they’ve managed it, and what it means for their future.
Malik Peay, 23, Los Angeles
Total debt: $5,100
Paid Down: $1,900
“I opened up [my credit card] right before I went to UCLA. I thought it was a smart idea for myself because I wanted to fit in with my wealthier peers. I wanted the full college experience. But I wish I had educated myself more on credit card interest rates and monthly payments. I definitely had to juggle multiple jobs while in college because of that. [I used my credit card] for payments like food, groceries, essentials, and then also [campus] organization fees that were extremely expensive. I wanted to feel my own sense of community at UCLA, and sometimes at college you feel like you have to do that through paying for these events and organizations. I couldn’t even afford a UCLA football game. I didn’t go to any because the tickets were just too high.”
“I was jobless at the beginning of quarantine and I was extremely stressed out. I eventually got a job during quarantine and now I have a financial footing where I can actually start paying off my debt and start a payment plan where I can do that. Freelance writing on the side is something I’m using to pay off my debt much faster than I would if I just had one job.”
“I think some [minorities] are born into thinking that debt is something that is innately going to be part of my life. I’ve seen my parents go through it, I’ve seen multiple generations of my family go through it, and I think that it’s something that I’m just going to face…. But I think that it’s something that’s also avoidable. Having these conversations is what really helps release that shame, because I think everyone can be a victim of the financial pressures that are in America, especially if you’re a minority. ”
Lauren Pellegrino, 25, New York
Total debt: $9,000
“I was 18 years old and opened up a $500 Capital One credit card to help build credit and learn how to responsibly use it. I lived at home and made pretty good money waiting tables and then [became] a paralegal, so I did fine keeping the balance low and making payments on time. But at the end of the day, I was an 18-, 19-, 20-year-old with a $2,000-$3,000 credit limit across three different cards because I kept getting credit card offers and credit limit increases. … Once interest started accruing, the debt just spiraled out of control and became impossible to keep up with.”
“I’m currently able to make payments only because I joined a credit consolidation program. Instead of making multiple large payments over the course of the month, I just owe the credit consolidation company $200 per month and they work with the creditors to settle my debt and stop interest accrual. Now I am on unemployment and make $700 per week, which is about $300 less than what I was making while working. When I factor in the $200 with my rent and other expenses, it definitely doesn’t leave much wiggle room for other spending or emergency funds. It would be impossible to [manage] without the credit consolidation program.”
“I’ve been wanting to go back to school for a long time but could never justify putting more debt on top of the credit card debt I already owe. I am 25 with no degree for no reason other than I can’t afford it and don’t want to drown in debt for the rest of my life.”
Cassandra Anderson, 23, Boston
Total debt: $1,780
“As a grad student [at Simmons University], I was very worried about what I would do if I had an emergency and needed funds quickly since I was barely making rent every month with my two jobs. At first I was able to keep my debt under control, but after I lost my second job due to COVID-19, my financial situation changed drastically and I needed money for groceries and other bills.”
“My one job barely pays enough for me to make all my other bills and I rely heavily on student loans to make my rent payments, though those have run out for the semester. When I think about the debt I owe, I get very nervous because I know that if I have another major expense come up there’s no way [I’ll be] able to pay it, and my ability to buy food every month has gone down exponentially as well.”
“Currently my credit card debt hasn’t impacted any future plans, but it has significantly reduced my credit score.”
Jenna Curcio, 23, Rochester, New York
Total debt: $5,000
“I realized that despite having a part-time job, getting about $40 from my mom every week to help with groceries, and the one-time refund check I got from my school each semester, I was having trouble with basic living expenses. I began to pay for groceries and other necessities with my credit card because New York was more expensive than I could have ever anticipated.”
“I can make payments, but barely. I’ve been doing the minimum payments or just over, for the most part, for as long as I can remember. It seems like I’m throwing raindrops on a forest fire at this point because the overall amount doesn’t seem to significantly decrease. It’s incredibly overwhelming and I feel like I’m trapped.”
“I’m currently living at home and unable to start my life. Once I get a job again, the first priority will be to try to pay off as much of my credit card debt as I can. [It’s] preventing me from being able to buy a home or even [rent] an apartment. I have other bills to pay as well and I’m only relying on freelance work for any type of income at the moment. I’ve been applying to jobs every day since the end of September and have only come across temporary opportunities, nothing solid or full-time. If our country actually cared about its people and we were able to have retroactive [COVID-19 relief] payments of $2,000 a month, and continuing them for the remainder of the pandemic, that would absolutely change my life and the lives of nearly everybody I know.”
Talha Mojawalla, 23, upstate New York
Total debt: $13,000
Paid down: $7,000
“I’ve been looking for a job since November 2019. It’s actually kind of funny — I got a job and I was supposed to start on March 14, 2020. My first day that I was supposed to go in they called me like, ‘Yeah, we’re going into lockdown so we’re not going to have you come in.’ And since then I obviously haven’t had much luck. I was supposed to do a couple shadow sessions at hospitals this past summer, which definitely didn’t happen.”
“My [debt] accumulation started out with tuition and then I’d say about a quarter of it was also medical bills, which also isn’t an uncommon occurrence. [Medical debt] is pretty common I know for a lot of people, which really shouldn’t be the case.”
“I’ve been talking with the debt collectors for the loans and some of them have been a lot more reasonable and understanding than others. One of them asked me a couple of questions as to whether [my inability to make payments] was related to COVID-19 and if I was able to get a job or not. And they said, ‘Okay, we’ll reach back out in a couple months to see if your situation has changed, but for now we’re just going to put it on hold.’ Then there’s a couple of others that have lowered the minimum payment required. But I’m still dealing with it. I try not to focus on it too much just because of everything else that I’m also trying to deal with. I’ll have to get to it at some point, but for now I’m just trying to live with it.”
