Lykins and Plankenhorn 1996).The post baby-boom group known as Generation X is accumulating a great deal of debt, mostly through credit cards. The average credit card balance of households headed by someone under 25 nearly doubled from 1990 to 1995. There seems to be little desire among these people to live within their means (Shenk 1997). However, young people who can establish good credit will reap numerous benefits. A good credit record can provide young consumers with access to financing, thus enabling them to make purchases that they otherwise would not be able to make. In addition, good credit can enhance young people=s chances of getting good jobs. Borrowers who pay on time and in full may be able to convince potential employers that they are responsible and can manage their own finances (Shafer 1997). However, missed payments on bank credit card debt reached a new high of 2.13% of outstanding credit card debt in the 4th quarter of 1997. The American Bankers Association reported a decline in the percentage of accounts more than 30 days overdue during the quarter, although there was a rise in the percentage of loaned dollars delinquent. Consumer debt represents about 20.6% of disposable income (Kingson-Bloom 1998). The debt-service ratio can be used as an accurate predictor of future consumer spending growth or a source for explaining aggregate consumer spending. Furthermore, the ratio of debt service to income, if analyzed together with other economic indicators, will reveal future income growth. This ratio analysis is beneficial to financial service institutions as through this, they can determine debt payment capacities of clients (Murphy 1998).On the whole the Generation Xers have a gloom and doom attitude towards money, and maybe with good reason. Social security will probably be out of money by the time they reach retirement age and most feel that they will never be out of debt, so they live life as such. ...
