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Young people better at avoiding overwhelming debt in Texas

Usually wisdom comes with age. However, this may not necessarily be the case when it comes to managing credit cards, according to a recently released study. Researchers have found that younger people in Texas and other states may have a decreased chance of finding themselves facing overwhelming debt from credit card bills.

The new study suggests that those who begin using credit cards at a young age may be more likely to develop a responsible approach to managing credit cards. The researchers found that a 19-year-old person is 12 percent less likely to be delinquent by 90 days or more on paying a bill compared to a person who is 40 to 44 years old. An individual who obtains his or her first credit card at the age of 21 is less likely to default compared to an individual who starts using credit cards at the age of 23.

Researchers believe that there are a variety of factors which have influenced the outcome of the study. Firstly, younger people who obtained credit cards prior to the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) tended to have higher levels of financial literacy. Researchers believe that this explains why the study found that although individuals between the ages of 18 and 25 have a slightly higher risk of 30 to 60 day delinquencies, they are less at risk of having longer term issues.

However, despite a decreased risk of credit card debt problems, there are many young people who started early with their first credit cards who still find themselves facing overwhelming debt from credit card bills later on. Although the challenge may seem daunting there are a variety of options for those who find themselves in this situation in Texas or in any other state. One possible solution is to file a Chapter 7 bankruptcy which has the ability to discharge credit card debts.

Source: Forbes, Your Teen May Be Better At Managing Her Credit Card Than You Are, Samantha Sharf, Oct. 18, 2013

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