21 April 2006
Young people are actually using credit responsibly, according to an industry study.
Despite conventional wisdom, the study found that young people had the lowest levels of credit card debt of any age group.
Although the under-30s were found to have the highest debt to income ratio, much of this debt was made up of very low cost student loans, meaning their debts were easier to service.
A total of 46% of their debt was made up of student loans.
According to the Alliance & Leicester survey, this means that those in their 20s actually spend the same proportion of their income on debt as those in their 30s and 40s.
Chris Rhodes, managing director of A&L Retail Banking said: "Our research confounds the stereotype that young people are spendthrift and irresponsible with their finances.
"Student loans are their largest commitment and whilst the interest on these are low, it still seems to constrain their appetite for other debt. The interest burden of this age group is not out of line with older groups. Indeed, 30 to 50 year olds see their debt burden peak as unsecured debt combines with mortgage borrowing."
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