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Top purchases underlying millennial credit card debt

Credit cards have driven up household debt over the five years. Unanticipated expenses, college loan payments and low wage growth are the usual culprits. Other avoidable expenses, according to data from the Tally credit card managing app, have also contributed to credit card debt for 18 to 34-year old consumers.

Tally performed a survey of 6,500 of its mostly millennial users and reviewed transactions between Jan 2017 and Oct. 2019. One group had above-average balances between $11,000 and $20,000. The second group had balances up to $3,000. Both groups usually had the same type of spending.

Millennials have avoided debt better than other generations.; however, their debt grew sharply last year. Roughly 23% of these consumers said that they carried a card balance for at least a year. Groceries, child-care or utilities were the biggest causes for carrying a card balance. But these consumers are emphasizing convenience instead of saving based upon their spending.

Restaurants were the top spending category and accounted for an average annual debt of $4,658 for the high debt group and $4,171 for the low debt category. McDonald's, Dominos, Buffalo Wild Wings, Chick-fil-A and GrubHub were among the top restaurants.

Next, travel had an average debt of $3,968 for the high debt group and $3,377 for the lower group. Uber, Lyft, Southwest Airlines, United Airlines and JetBlue were among the top retailers. Transportation was third with an average debt of $2,103 for the higher debt group and $2,284 for the next group. Shell, Geico, ExxonMobil and State Farm were included among the top providers.

Finally, spending at grocery and large retailers led to an annual average debt of $1,792 for the high debt group and $1,762 for the lower debt group. Walmart, Target, Whole Foods, Trader Joe's and Kroger were among the major retailers. Spending also included retailers Amazon and Apple.

A TD Ameritrade survey also revealed that 49% of millennials engaged in non-essential spending that affects their credit card debt. This group also spent $838 per amount on non-essential items compared to an average $697 for all age groups. In addition to convenience, reward programs such as travel points have lured millennial spending.

When credit card debt becomes overwhelming, an attorney can help develop strategies to avoid credit harassment and provide a fresh start. They can also explore strategies such as bankruptcy to help a debtor seek debt relief.

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