WESTMINSTER, Colo. — Young Coloradans are seeking debt counseling at record rates, according to the nonprofit Money Management International. Rising inflation and living costs are straining household budgets, as Generation Z struggles to keep up.
Kaleb Knoll, 25, of Westminster, Colorado, had seven credit cards, all of which were maxed out last year.
“You never really know when it's out of control until you're at the bottom looking up,” Knoll said.
He says his spending wasn’t glamorous.
“I wish I could say I was living a life of luxury on credit cards, but it was just daily insignificant things… gas, groceries.”
Making minimum payments barely dented the balance.
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“My minimum payment was $230, and $160 of that was going straight to interest,” Knoll said. “It kind of just makes you feel stupid.”
He said two of his friends are trying to work off debt, with one stuck in a predatory plan and the other putting all her tips into her balance each month.
“I don't have a single friend who's not in credit card debt,” Knoll said.
A recent TurboDebt report found Gen Z Coloradans carry about $34,000 in unsecured debt.
Tara Alderete, senior director at MMI, says inflation and minimum payments create a downward spiral.
“When we're making just minimum payments, most of it goes toward interest. It can take close to 30 years to pay off debt,” she said.
Her advice:
- Get an accurate picture of your income and debts
- Call creditors to ask for lower interest rates — “the worst they can say is no”
- Pick a payoff strategy like the snowball or avalanche method
She also suggests checking the Better Business Bureau, TrustPilot, or NFCC.org before enrolling in any program.
Referred to MMI, Knoll said the nonprofit negotiated with Amex to cut his interest from 29.99% APR to 2.99%.
Other interest rates were also lowered.
He closed all his credit cards and has paid off 26% of his debt since October.
“My goal is to get it done by spring of next year,” Knoll said. “That’ll be a new beginning, a fresh start.”
Other credible resources for debt solutions include:
