Many young adults have limited financial resources to meet their needs and buffer against economic shocks. In turn, young adults ages 18 to 24 may turn to credit cards to finance daily and emergency expenses. Because of their shorter credit histories, young adults are likely to face higher interest rates, and with limited incomes they may struggle to manage debt at this stage of life. 

Using deidentified consumer credit data from a major credit bureau we find that

• nearly 1 in 5 young adults ages 18 to 24 with a credit record in the US have debt in collections;
• young adults are particularly vulnerable to credit card and auto/retail loan delinquencies, compared with older adults;
• young adults living in communities of color and in southern states are more likely to hold past-due debt; and
• targeted policies can help improve the financial resilience of young adults and potentially reduce disparities in debt burdens.