A lot of Americans filed for the bankruptcy at the height of the global economic recession. They simply cannot pay off on their credit card debts anymore in the face of the increasing unemployment rate.
Researchers from the University of Michigan found that out of all the sectors and age brackets affected by the recession, those who are 55 years and above are the ones who have mostly raised bankruptcy levels at an all time high. They have mostly used up all of their savings to survive the recession, dealt with foreclosures more often as they lost shares, and borrowed larger amounts or incurred huger debts on their credit cards compared to their younger counterparts who also file for bankruptcy.
As of the year 2007, the average credit debt of those aged 55 and over is almost double the debt amount of the younger generation. While they incur around $24,000, the younger credit owners use up to more or less $13,000.
Today, the figures remain relatively stable for both sectors. In a three-year period, there is of course a registered rise on the amount borrowed or the credit debt of each sector but the percentage increase is not as significant. The finding in 2007, however, remains that those aged 55 and up incur more credit debts.
75 percent of those aged 55 year old and up filing for bankruptcy have incurred credit debts, an indication that the recession has had the hardest impact on them. Add to this the reality of limited resources which made economic survival a source of stress for most people.
Also, those aged 55 and up have also been more likely to raise delinquency levels in relation to their credit card accounts. Delinquencies in early and late stages have seen a rise in percentage from the sector.
Financial reports offer a solution for recovery by suggesting ways to loosen stiff requirements when it comes to credit lending and availability. For recovery to be initialized, financial analysts stress the importance of the credit card industry's cooperation by maintaining rates of interests that reasonably serve their consumers well in accordance to the Credit Card Act as well.
In the long run, financial report statements recommend real and effective ways of dealing with debt but at the moment, keeping fees lower is right enough to ease out burdens of heavily affected sectors such as those aged 55 years and over.