Middle-income Americans age 50 and older are now carrying more credit card debt on average than younger people, according to a 2012 study released by Demos. This is a reversal of the findings from the Demos survey which took place in 2008.
The economy plummets. You lose your job. Soon, you start to find it hard to make ends meet. You start putting things on your credit card. Then you fall behind in your card payments. All the while you’ve been desperately looking for a new job. Little do you know that being behind on credit card payments may stand between you and a job – the very thing that could get you back on the road to financial health.
The job market has been tough for older workers, but did you ever imagine that you wouldn’t land a job because of your credit report?
It’s possible.
As I wrote about in my Forbes blog, Bad Credit Can Cost You a Job, if you’re looking to change careers, find a new job, get promoted, or just hang onto the one you have, a messy credit report can trip you up.
It’s too late for Tonisha Howard, the mother of three in Milwaukee who was fired for leaving work to be with her hospitalized two-year-old. And forFelix Trinidad, who was so afraid of losing his job at Golden Farm fruit store in Brooklyn that he didn’t take time off to go to the doctor—even after he vomited blood.
When Vernardo and Claire Simmons-Valenzuela married, they imagined all the trappings of a middle-class life. Soon enough, they had kids. Claire finished a master's degree. They held jobs as an Army medic and a physician's assistant. They dreamed of next steps: owning a home, taking their first vacation in years. Vernardo would return to school for a bachelor’s in nursing. But when payments for the couple's $187,000 in combined student loan debt came due, most of it accrued during Claire’s graduate education, they put those dreams on hold.
As tuition costs and enrollment rose through the 1990s, grant money did not keep pace, meaning students have been shouldering an ever-increasing share of their education costs. While before, most were able to finance their studies with grants and part-time work, loans are now inescapable for many.
"This generation is the first to shoulder the costs of their college primarily through interest-bearing loans rather than grants," Draut said.
Senior Policy Associate Javier Silva examines the new financial insecurities created as more Americans refinance their homes.
That's the short version of a new and disturbing study by Silva called "House of Cards: Refinancing the American Dream." It shows how millions of U.S. households are falling into a vicious cycle of tapping their credit cards and then refinancing their mortgages to extract needed cash from the equity in their homes.
According to the consumer advocacy group Demos, from 1992 to 2001, the youngest adults (18 to 24 years old) saw the sharpest rise in credit-card debt-104 percent-to an average of $2,985. The second-highest increase-55 percent-was among young adults (25 to 34 years old), who also had the second highest bankruptcy rate, just after those ages 35 to 44.
According to the educational lender Nellie Mae, incoming college freshmen will amass $1,500 in credit-card debt before the end of their first term.
But a national debt of more than $14 trillion makes us vulnerable because our economy is the wellspring of our military might, as well as the happiness and self-confidence of a fully employed people.
A study released by Demos, a research and advocacy organization, may shed light on why some working families have credit card debt and others don't.
The study, "Understanding the Debt Difference," is based on survey research of 2,248 low- and middle-income adults between April 2008 and August 2008, and contrasts the demographics, financial habits and economic circumstances of those with credit card debt and those without it.
The number of Americans age 60 and over in debt is alarming. A recent report by the AARP’s Public Policy Institute and the research organization Demos revealed that Americans over the age of 50 carried substantially more debt on credit cards — an average balance of $8,278 — than those under 50, whose average balance was $6,258.
More and more Americans are spending their golden years racking up debt—a trend that if left unchecked could derail entitlement reform and alter the traditional pattern of wealth being transferred from older to younger generations.
For the past several decades, millions of senior citizens have been able to enjoy relatively safe retirements, in part due to a lifetime of savings, private pensions, Social Security, Medicare, and home ownership.
The company an employee works for makes all the difference. Over the course of a 40-year career, workers at some companies lose tens of thousands of dollars in 401(k) fees and earnings -- sometimes more than double the savings lost by workers at other firms, according to an exclusive analysis of about 2,300 company 401(k) plans by FutureAdvisor, an online financial adviser.
Nowadays, whenever Social Security comes up in policy debates around Washington, the discussion often focuses on how best to cut benefits in order to shore up the program’s finances.
Like many New Yorkers, Hazel B. of Queens struggled to get by after she was laid off from her job as an accounts receivable administrator. A single mother of two, Hazel relied on credit cards to make ends meet while she looked for work.
Finally, she found a job opening that looked promising. She went on two interviews and took a test given by the potential employer. She believed she had performed well, but then word came back that Hazel would not be hired because of negative information in her credit report.
NerdWallet underlies its findings with a report by public policy organization Demos from last summer, which added the further frightening fact that among folks investing in 401(k) plans, a full two-thirds had no idea they were payinganything at all for their 401(k) (which actually makes all of the folks who guessed wrong in NerdWallet's poll look pretty smart by comparison).
Bet if I asked, the odds are good that many people could tell me to the penny what they just paid for a gallon of gas.
So how much did it cost you to invest in your 401(k) last year? I don't know myself. And you likely don't know either.
Over the years, most of us have heard that if we just start saving a few hundred dollars a month in our 20s, we can retire a millionaire. Compound interest is your best friend.
