It is common knowledge that young military members are rarely flush with cash. New information shows that younger service members in Pennsylvania and elsewhere may be at risk for serious problems with credit cards, thanks to costly practices that abound throughout that population. Official reports show that members of the military are more likely to end up paying the minimum payments on their debt and a significant amount in late fees. Even more troubling is the fact that a large number of military members take out cash-advance loans to cover their financial shortfalls.
Financial planners throughout the nation say that service members may simply have too many other things going on in their lives to pay attention to their finances. Scores of military personnel waste large amounts of money on late fees and over-the-limit fees, according to financial professionals. Further, these individuals may feel guilty during the holidays, as they are not always able to be near friends and loved ones. As a consequence, they overspend on travel and gifts, often without thought about the future consequences of those decisions.
Even though about 49 percent of military members say they pay off their credit cards in full every month, those who are younger may be more likely to seek additional lines of credit. Their military paycheck may be their first steady income, and budgeting may be new to them. Also, like many college students, these young people are often away from home for the first time, and they may not be making the best financial decisions. Military members are protected to some degree by the Military Lending Act, but it appears that short-term cash-advance loans may still be overlooked by current protections.
Military members who are taking out payday loans to cover their credit card payments or late fees may benefit from consulting a qualified bankruptcy attorney. These professionals can help service members learn more about their financial options for debt negotiation and filing for bankruptcy, depending on their specific situations.
Source: Detroit Free Press, "Susan Tompor: Younger troops at higher risk for fees on credit debt" Susan Tompor, Dec. 12, 2013