Carrying Debt? One in Five Don’t See a Way Out
Nearly one in five Americans who carry debt do not believe they will ever pay it off according to a new report by CreditCards.com. That is double the 9 percent who said the same thing when asked in May 2013.
On average, when it comes to credit card debt, car loans, student loans, mortgages and any other type of debt, Americans expect to have it paid off by the age of 53, according to the report. But, 43 percent said they expected to remain in debt at age 61 or older. That included 18 percent who predicted that they will owe money when they die.
"As for why the number nearly doubled since last year, I think it's just that some people learn later than others. We've been through the recession and I think people have their eyes open to just how deeply they are in debt. I think people are more aware of what debt is. The other factor is student loans," said Daniel Ray, editor-in-chief of CreditCards.com. "Student loan debt has surpassed credit card debt and that has made people feel like they will never be able to pay it off. It'll be a life long companion for some."
Millennials are the most optimistic. Only six percent of 18-to 29-year-olds said they will never get out of debt compared with 31 percent of those age 65 and older and 22 percent between the ages of 50 and 64.
"I think there are some rose colored glasses on young people when you ask them to look far ahead into the future," Ray said. "When you're getting older and you see you're still in debt. There is some resignation and realization that 'this will likely be the way it's going to end.'"
The holidays are upon us and so far, more than one-third of Americans, about 38 percent, have already incurred debt this season. But, 55 percent plan to eliminate the debt within one month while 74 percent expect it to linger for about three months.
"The folks who have the least tend to be the most frugal about tacking on more debt," Ray said. "Those who have the means to pay it off are more likely to indulge."
"It's easy to feel paralyzed when you're overloaded with debt and feel like you'll never get out, but the worst thing you can do is nothing," Matt Schulz, CreditCards.com senior industry analyst, said in a press release Wednesday. "It's incredibly important to make moves to begin knocking down those debts before they truly do grow out of control."