Young women suffer from greater debt

While U.S. consumers in their 20s and 30s as a whole suffer from debt that can have a far-reaching impact on their lives, young women appear to be under the greatest pressure.  Experts note that females between the ages of 18 and 34 may be experiencing the heaviest debt load, with credit cards often a contributing factor.

Young women generally first take on debt when they apply for student loans.  When they later enter the workforce and earn less than their male counterparts, young women sometimes rely on credit cards to make ends meet as they struggle to balance loan payments with their growing social lives.  As a result, their debt mounts -- with often too little financial knowledge to make sense of it all. 

Experts note that borrowing to pay their way through college has become the norm for students.  Today, more women than ever before are attending universities.  According to the U.S. Department of Education, women made up 56 percent of undergrads in 2000.  As a result, females graduates increasingly come away with not only a diploma, but student loan debt.  The Project on Student Debt, a nonprofit group that seeks to find cost-effective solutions for increasing educational opportunity, reports that women graduated with an average student loan debt of $19,360 in 2004.

Once they get past the college years, debt problems may continue to plague women.  Females between the ages of 25 and 34 earn 85 percent of men's salaries, based on data from the U.S. Department of Labor, with the gap only expanding with age.  As a result, female consumers end up putting more of their income toward paying off debts.  In 2004, among workers aged 25 to 34, 23 percent of women with bachelor's degrees spent over 10 percent of their earnings repaying student loans, versus 16 percent of men.    

Additionally, a recent Smith College study showed major differences in the way men and women run their finances -- much of it having to do with credit cards.  The study's lead author, economics professor Mahnaz Mahdavi, noted that females on average have more credit cards than males, adding that consumers with more credit cards often have more debt as well.  

Mahdavi explained that women are more likely to use a credit card to pay for personal items or for bills such as phone or Internet service.  Additionally, they are more likely than men to revolve a balance and to make late payments.

Some experts urge women to be proactive and to be more willing to figure out their finances on their own.  Women suffering from credit card debt can opt to begin using a low interest credit card or to transfer their existing balance to a card with a lower APR.

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Updated: 11-21-2017