The general expectation is that Millennials will start paying down all the credit card debt they're piling on when they are older (and, of course, employed).
After all, that is the broad trend you see across earlier generations.
But Lucia F. Dunn, a professor of economics at Ohio State University, warns of a more dangerous pattern emerging. Millennials are not only going deeper into debt than earlier generations did at the same age, they are paying it off so much more slowly that they will die still owing money, her analysis suggests.
"It was a wake-up call for us to see that," says Dunn, who conducted the research with Sarah Jiang and published the results in the journal Economic Inquiry early this year.
"Attitudes toward taking on debt have clearly changed. Being in debt has sort of been gentrified. It's not a stigma the way it used to be."
Dunn acknowledges that college expenses and other factors are contributing to the current debt dynamic for Millennials. But she still worries about their ability to dig out in the future, and she says the findings of her study suggest the banking industry might be wise to start thinking about this issue too, if it wants to avert future losses.
The study looks at borrowing and payment data for more than 32,000 people ages 18 through 85.
It finds that people born between 1980 and 1984 are going to have much more debt at age 45 than previous generations did at the same age. On average, these "children," as the study calls them, will owe $5,689 more at that age than their parents' generation (people born from 1950 to 1954) and $8,156 more than their grandparents' generation (people born from 1920 to 1924).
The study also shows a troublesome difference in projected payoff rates for the youngest borrowers. The children's payoff rate is 24 percentage points lower than that of their parents and 77 percentage points lower than that of their grandparents.
When Dunn analyzed the data across all ages, she found that credit card debt tends to start accumulating when a person is young, peaks sometime in middle age and tapers off in later years. But when she separated the data by age groups, the pattern for the children diverged from the older generations, with debt continuing to build into their late 70s.
But she has an idea for forestalling this grim outcome.
The same study found that when the minimum payment went up by 1 percent, the average payoff rate went up even more—by 1.9 percent.
"It's a psychological shock to people," Dunn says. "That's the only way we can explain it."
She proposes that credit card issuers-or perhaps policymakers-act on this insight and use higher minimums as a tactic to help people get their debt under control. "It's going to take something like that, because there's so little self-discipline amongst consumers," she says. "It's so tempting just to slide by with the minimum."