Those 25-year-olds with 2004 debt figures would have been ten in 1989, and among the first to watch deregulated television advertising (allowing program-length commercials, for example). The face of children’s televsion changed, and ushered in the era of all-advertising all the time. Those kids grew up in a very different time.

Do they believe that buying/owning things will make them happy? I don’t know — does advertising work?

Just one thought.

there’s a really good book just out called Going Broke by Stuart Vyse, a psychologist who looks at debt from the perspective of behavioral economics. basically, whether young or old, our brains are badly wired for an environment in which getting credit and making purchases are both easier than ever.

anciallary student loans and inability to accurately compute how much money they will make in the future. . .school and youth has a way of convincing you that you will always make money in the future. Then you wake up and your three years out of college and no one gives a crap about the degree.

I haven’t read the Vyse book, but certainly supply has something to do with it. From a personal standpoint (sample size n=1), when I graduated from college in 1984 I had no debt except for a student loan of under $1000, and I applied for a credit card and was turned down, despite having a job and demonstrable income. American Express actually approved me, but you have to pay that off monthly so the risk was low for them (and the fee high). But a few years after that I began to hear from friends still in college that they were getting offers of cards before they graduated. While I had no opportunity to rack up credit card debt early on, a 25-year-old now has the opportunity to be in the game for 7-8 years by the time they are 25.

I keep hearing from my psychologist friends that the part of the brain that can take into account long-term consequences is not fully developed until about 21-23 years old (which explains teenager behavior). It may also explain why someone would graduate from college with not just student loan debt, but also credit card debt–lack of looking at the long-term consequence. Evaluating opportunity cost is not a skill that people seem to have developed when they graduate from college right now, though I recall a lot of discussion about it when I and my friends were considering job offers, places to live after graduation, etc.

I probably sound like a crotchety old man, so I’ll quit now.

As part of that generation, the only thing that prevented me from even taking a credit card out during college was my parents’ training – “DEBT IS BAD, ESPECIALLY CREDIT CARD DEBT. DEBT IS BAD.”

I think the other commentators brought up some good points – the advertising industry has ratcheted up its efforts, but perhaps parents and educators have not increased the amount of common sense financial education they impart. Credit cards offer instant material gratification, which can be hard to pass up.