It's often good to be young. Consider the words of Walt Whitman: "Youth, large, lusty, loving -- Youth, full of grace, force, fascination." Of course, Whitman followed that up with "Do you know that Old Age may come after you with equal grace, force, fascination?"

Let's consider instead a more pessimistic view, from Friedrich Nietzsche: "Youth is disagreeable time, for it is neither possible then nor prudent to be productive in any sense whatsoever." This seems unduly harsh, but in light of some statistics I recently ran across, perhaps it's rather true, too.

In Credit Card Nation, a book on America's problem with debt by sociologist Robert Manning, there's a telling chart, revealing credit card payment patterns by age group (as of 1998, based on self-reported data).

Percentage of those who pay their balance





Under 35 39.0 22.5 38.5
35-44 46.5 19.1 34.4
45-54 48.2 22.7 29.1
55-64 61.0 20.1 18.9
65-74 74.0 14.9 11.1
75+ 86.3 7.8 5.9

That's quite a difference, isn't it? The oldest group paid off its bills in full more than twice as often as the youngest group. Considerably more than a third of the youngest group hardly ever paid off its balance -- yikes!

This should be more than a curiosity to you -- it's a travesty. Look at the big chunks of America that are not paying off their plastic-generated debts in full each month. In many cases, this is happening because they're living beyond their means, instead of living below their means and socking away the difference to provide for a comfortable future. (We can help you secure an enviable retirement -- test drive our Rule Your Retirement newsletter service for free.)

Making matters worse, many of these folks are being charged outrageous interest rates. Last year, I detailed the top penalty rates for major card issues (as of October 2004):

  • MBNA [bought by Bank of America (NYSE:BAC)], 24.99%
  • JPMorgan Chase (NYSE:JPM), 26.74%
  • Morgan Stanley's (NYSE:MS) Discover, 24.99%
  • Capital One (NYSE:COF), 25.9%
  • American Express (NYSE:AXP), 26.74%

Some well-known banks were charging close to 30%!

If you carry $5,000 in debt and are charged 30% interest annually, that's a whopping $1,500 you're paying, just in interest. The typical household with credit card debt owes some $9,000 these days -- at 30% (and some people are charged even more!), that's $2,700 you'd be paying, without even decreasing your principal.

When it comes to your credit card bills, act older than your age. Those 77-year-olds know what they're doing.

Be smart about money -- dig yourself out of debt (we can help) and start accumulating wealth instead of shedding it. You can learn a lot of surprising things about the credit card industry in our Credit Center, which also features guidance on how to manage your credit effectively.

Your credit habits and record are a big deal -- being smart about credit can potentially save you tens of thousands of dollars. Learn more in the following articles:

And read about all things credit-related on our Consumer Credit/Credit Cards discussion board.

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Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.