Millennials might invoke visions of fun and youthful enthusiasm, but there is another side to that coin – two out of five millennials are worried about how much debt they are carrying and are actively looking for ways to manage it, according to a new survey by FICO.
The study found that 37% of millennials falling in the 25-34 age range are worried about how much they owe and 33% are looking to get some help to manage it. Just how much debt? For millennials student loan debt is the biggest burden they carry after residential mortgages, with 32% carrying $20,000 or more in student loans.
While student loan debt is high, cars also help millennials rack up debt, with 45% report owing at least 7,000. Why? They report seeing car’s as being an essential part of life. With 91% saying its the optimal way to get around on a day to day basis, and 19% letting researchers know they would charge a car to their credit card.
With all of this delinquency is a reality for some. “Our research shows that delinquency risk is highest among 25-34 year-olds, who are still developing their financial literacy skills and learning to manage their loans and lifestyle costs. The silver lining for lenders is that Millennials aged 24-35 are keenly aware they may need some help. For financial institutions, there’s a great opportunity to minimize the risk of delinquency by alerting customers when payments are due,”Tim Van Tassel, vice president of FICO’s credit lifecycle business line.
Alerts for all the generations
No matter how young or old people are email alerts are their top choice for being kept in the loop when it comes to being notified that they are late for a payment. Millennials are on board with this too, with 65% want to be contacted via email when their student loans are delinquent by 90 days.
But when it comes to their mortgages or home equity lines 35% would rather be notified via an app when they are less than 90 days past due, and an actual phone call when they are more than 90 days delinquent.
This survey was conducted online by FICO in October and November of 2015. They interviewed 1,000 US consumers, who were above the age of 17.