Consumer debt is increasing nationwide, affecting individuals in all types of economic and sociographic groups. However, millennials seem to be the generation hit the hardest. In fact, millennials living in certain U.S. cities are hurting the most when it comes to their debt, according to a recent study from LendingTree.
LendingTree found that individuals in the millennial generation, born between the years 1981 and 1996, carried large amounts of auto debt, as well as student loan debt. These two categories made up the biggest portion of non-mortgage debt carried by millennial consumers.
Of 44 million borrowers, the total amount of auto loan and student loan debt is an estimated $1.6 trillion. A recent report from the New York Fed also found that millennial consumers had the worst delinquency rates when it came to student loan debt and auto loan debt.
The top seven cities where millennials struggled the most with rapidly growing debt, included the following metropolitan areas:
- Worcester, Massachusetts;
- Bridgeport, Connecticut;
- Des Moines, Idaho;
- Memphis, Tennessee;
- Stockton, California;
- Deltona, Florida;
- Columbia, South Carolina;
Younger consumers in Worcester, Massachusetts, were reported as incurring the most debt. According to LendingTree, the average non-mortgage debt among millennial consumers in Worcester increased by 29%, the largest portion of this debt being credit cards. In fact, consumers in the northeastern part of the country reported the largest increase in debt. Of the top five locations with the largest amount of debt increases, three of them were on the east coast.
Millennials in the southern regions of the country saw the largest increases in credit card debt. Two Florida cities, Deltona and Palm Bay, reported the highest increase in average credit card debt. Millennial credit card debt increased by 42 percent between 2018 and 2019 in Deltona while Palm Bay millennials increased their credit card debt by 40 percent.
Several factors contribute to why these areas are hit harder than others when it comes to accumulating debt, including the cost of living, median incomes and monthly cash flow. This large amount of debt is preventing millennial consumers from making other major life steps, including purchasing a new home.
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