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Young people in Mississippi and around the country are finding it increasingly difficult to manage their revolving debt according to the New York Federal Reserve’s most recent Quarterly Report on Household Debt and Credit. The report reveals that more than 8% of the credit card balances owed by Americans between 18 and 29 years of age are 90 days or longer past due. This is the highest rate of delinquency since 2011 when the economy was still recovering from the Great Recession.

Financial experts say that rising interest rates are likely responsible. The Federal Reserve raised the cost of borrowing several times in 2018, and the average credit card interest rate for consumers with good credit is now 18%. Those with troubled credit histories often pay as much as 25% interest on their revolving debt. Higher interest rates also make it more difficult to escape the credit card debt trap. Six out of 10 Americans with credit cards carry a balance, and more than half of them have done so for a year or longer.

The figures also reveal that more Gen Z and millennial Americans are applying for credit cards. Between 2008 and 2012, only about four out of 10 Americans in their 20s had one or more credit cards. That figure has now risen to more than 50%. Younger borrowers also tend to sign up for credit cards that offer reward points or travel perks rather than low introductory interest rates.

Young borrowers are sometimes reluctant to seek bankruptcy relief because they are worried about ruining their credit. Attorneys with debt relief experience could explain that a discharged bankruptcy often increases the credit scores of individuals with a history of late payments. This is because bankruptcy reduces the amount of debt they owe and improves their debt-to-income ratios.