Just before Halloween, a public policy group called Demos released a scary report titled, "Generation Broke: The Growth of Debt Among Younger Americans." Here are some of its findings (in 2001 dollars):

  • Average credit card debt among young adults (aged 25-34) increased 55% between 1992 and 2001, to $4,088. The average indebted young-adult household (aged 25-34) now spends almost a quarter of every dollar earned on debt payments.
  • The youngest adult households (aged 18-24) with debt spend nearly 30 cents of every dollar earned servicing debt, twice the amount spent on average in 1992.
  • Americans aged 25-34 have the second highest rate of bankruptcy, and the rate increased between 1991 and 2001.
  • Credit card debt among the youngest adults (aged 18-24) skyrocketed 104% during this same period to $2,985. Growing numbers of Gen-Xers carry a balance, and 71% of credit-cardholders aged 25-34 revolve their balances, compared to 55% of all cardholders.
  • Student loan balances have doubled in the course of a decade. The average 2002 graduate carried $18,900 versus $9,000 for 1992 graduates. (Visit our College Savings Center for tips on how to pay for school.)

In a New York Observer article, Lisa Chamberlain painted a scarier picture, as she explained how Gen-X got in this mess and why it may not easily get out:

"For starters, they were the first generation to graduate from college with enormous credit-card and student-loan debt -- just as entry-level wages were dramatically dropping. And when the bubble burst in 2000, Gen-X, compared with other age groups, had the largest percentage of their assets invested in the stock market. Furthermore, as this generation now enters what are supposed to be prime earning years, a jobless recovery has set in and mid-level white-collar jobs are increasingly moving overseas. To top it all off, long-term deficits will balloon out of control as baby boomers sap the life out of Medicare and Social Security, increasing the need to raise taxes."

The situation isn't hopeless, though. Take heart, Gen-Xers! Credit card debt can be paid off, even massive debt. Let us help you, in our Get Out of Debt area that features a free, six-step, how-to guide. As you address your debt, take time to learn how the credit industry works, because you'll need to understand it in order to have it work best for you.

As you manage to save some money over time, invest it carefully. Read up on investing, as the more you know the better your performance is likely to be.

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