What are the most important reasons for which teens get into debt in the US?

First, own an apartment, buying a car, mobile phone contracts, and too many orders on the internet – are common reasons why people get into debt from an early age. In addition, they often have no reserves or are insufficient for emergencies. The debt of young people tends to increase. The temptations of consumption can have particularly serious effects on young people aged 18 and over, as they may receive a debit or credit card at this age.

Teens in Debt – Why Do Young People Get Into Debt?

But what do young people spend so much money on and what products do young people owe? Due to the widespread flat rate, telephone providers would no longer be in the first place among creditors. However, the smartphone and especially its purchase still plays a key role in the debt of young people, according to online customer experience. Because it is and remains the number 1 means of communication.

According to the survey mentioned above, the following products are at the top of the wish list and are therefore the cause of youth debt:

  • Technical devices
  • Purchase of the car
  • Clothing and jewelry
  • Lifestyle
  • Purchase of luxury goods

What are the reasons for the debt?

The reasons for indebtedness at an early age are varied. One of the most common causes of youth debt is the “cell phone debt trap.” Owning a mobile phone has become a norm not only for adults but also for teenagers. Currently, contract mobile phones are offered very cheaply or for free. Few people know, however, that a “free mobile phone” is usually associated with a high rate that must be paid monthly. The various additional features may also add additional costs to the call costs. To avoid cell phone debt in the first place, it may be helpful to use a prepaid cell phone, as you cannot make more calls than the amount on the prepaid card.

High-interest rates on overdrafts

More and more young people have a youth account with an overdraft: because they have their income or their parents have agreed to the overdraft. There is a great temptation to buy something you can’t afford. How high the account overdraft limit is and if it is even possible to exceed your youth account varies from bank to bank. In any case, an outdated account leads to very high interest rates, and the coverage of fixed costs is threatened.

How do I handle money safely?

You have to learn to deal with money. Debt counseling also attributes the financial problems of young people to gaps in their knowledge of how to deal with money. However, for some purchases, it is essential to leave something aside promptly. The cornerstone for money treatment is laid with the first pocket money. A regular amount of money that young people can have for themselves is the best way to know the value of money.