Millennials, those youthful consumers born after 1980, are about to overtake Baby Boomers as the largest living adult population in the U.S., with more than 74 million of them working and accruing debt. Speaking of debt, there is a lot of it; CNBC says the average student loan debt is around $33,000 – and yet that isn’t even the main source of debt for the older millennial.
That’s why the chances are good that your business will often be conducting debt collection from the millennial population. What are some special considerations related to this age group? Are there any communication best practices to follow?
Facts About Millennials and The Debt They Accrue
According to CNBC, Millennials between the ages of 25 and 34 have around $42,000 in debt. The highest level of debt is from credit cards. But CNBC says these young professionals also have other stressors that prior generations didn’t have, such as higher education expenses and student loans as well as the high cost of housing. Almost one-half of Millennials are 90-days past due on at least one bill. In fact, Americans owe more than $1 trillion in debt from student loans. It’s possible that other debts will suffer as these people spend more money on college debt.
While debt is increasing across all age brackets in the United States, these trends are particularly troubling for an age group that is just getting started on a career path. CNBC says that Generation Z, the age bracket that comes behind the Millennials is following in their footsteps with an average debt of $4,343.
Given the high debt ratio for these young people, are there any considerations for handling collecting debt that might be different from older populations?
Best Practices for Collecting Debt from Millennials
Collecting debt from Millennials is actually different from GenX or the Baby Boomers. First, it might be more difficult to reach these young consumers, because most of them have given up a landline for a personal smartphone.
Pursuing debt collection from this youthful population requires a few tricks in order to accommodate their personal preferences and styles:
- Use technology to reach Millennials. They are one of the first generations to grow up with the immediacy of the internet and a host of software tools. Debt collection must mine this tech-familiarity to reach these consumers.
Tip: Try setting up a web portal so these customers can explore easy online payment.
- Make connections with Millennials and use the power of relationships to pursue debt collections.
Tip: A compassionate and diplomatic approach to debt collection can go a long way when it comes to collecting what’s owed.
Debt collection for the Millennial population requires some flexibility to handle the special needs of this population. Talk with the team at TSI to learn best practices in debt collection. Learn more today.