3 Main Types of Debt Owed by Women

Are you in debt?

Generally, women don’t tend to have more debt than men. However, this is not true when it comes to young women. According to a survey by LendingTree in 2017, women aged 22 to 37 are less financially satisfied, own fewer homes, and have more debt than men of the same age group. It was found that these women held an average debt of $68,834, which was about 30 percent higher than the average debt of $53,017 accumulated by men. There are certain types of debt that women are more likely to take out than men, and they include:

Student Loans

Research by the American Association of University Women, revealed that women held almost two-thirds of the total outstanding student loan debt in the US in 2016, which amounted to more than $800 million. Women do not only owe more in student loans; they also take a longer time to pay them off. According to Credit Sesame, women in their 50s have the same amount of student loan debt from the last decade, while men have eight percent less. Many of which are trying to get out of student debt – learn more here.

Payday Loans

The Consumer Financial Protection Bureau reported that women account for 52 percent of all payday loan borrowers. This type of loan is especially sought after by African-American and Hispanic women with limited financial means. It provides a quick and easy way to pay unexpected expenses such as medical bills and auto repair, but it comes with comparatively higher interest rates. Some lenders prey on desperate borrowers by offering payday loans with extremely high interest rates.

Credit Card Debt

A recent survey carried out by the Consumer Credit Counseling Services found that women had more credit card debt than men because of a number of reasons. Firstly, about 60 percent of women said that they carried a balance over to the next month compared to just 51 percent of men. Also, 42 percent of women paid only the minimum amount on their credit cards, compared to 38 percent of men.

Generally, women pay higher interest rates because they are less likely to do comparison shopping to find the best credit card deals. They are also less able to resist a sale and more likely to purchase unplanned items than men.

However, the survey also discovered that women have a greater tendency to undergo credit counseling to learn how to increase credit score worthiness and get out of debt.

It doesn’t matter whether you are male or female, having debt can be a huge worry and causes of stress. But, if you are willing to work hard at controlling your spending and saving money, you will eventually become debt free one day.

Thanks to Jane Sandwood