Millennials Fear Credit Card Debts More Than Death or War
Fear of failure is considered as the most common terror in the world. However, millennials have deviated from the norm and recorded that their worst fright is credit card debts. Yes, more than death or war, this generation of young ambitious and talented individuals are scared of drowning in bills and interest rates earned from their cashless purchases.
In a survey conducted by Credible.com, millennials considered credit card debt as the scariest concern they could ever face in life. Most people find this ironic as the majority of Americans are indebted for around $800 million.
About 33.2% of the respondents voted for credit card debt as the scariest, 20.4% voted for dying, 16.8% for the threat of war, 11.0% for not being able to retire, 6.4% for climate change and 12.2% fear not any of the options mentioned.
Millennials usually get into debts due to emergency expense, sizable one-time purchase and the choice of not paying for dues despite having the resources to do so. They consider accruing interest and making monthly repayments as the most crucial aspects of credit card debt.
Things you shouldn’t pay with your credit card
Cashback and rewards are common reasons why you swipe your cards. Credit cards are helpful in managing your budget flow but are dangerous if you use it for the wrong purchase. Here are a few things you shouldn’t pay for with it:
- Unsecured online shopping – Do your homework before spending. Make sure that the online store is reputable and customers don’t complain about getting scammed. Customer feedbacks and message boards are useful sources in assessing the credibility of a website or company.
- Credit card bills – Technically, you might not be able to pay your credit card bills using another credit card. What some people do is that they use cash advance features to pay-off debts without considering that cash advance privileges come with a hefty fee and interest rates.
- Large purchases – Furniture sets, entertainment showcase, high-end mobile phone and other big-ticket items should be paid in instalments. Credit card providers in the Philippines have repayment schedules with usually 0% interest rates. Check with your relationship officer or bank representative regarding terms and conditions tied up with this perk.
- Small indulgences –Never be tempted to swipe your plastic card for a sandwich or a cup of coffee. Small purchases can be easily ignored but can also pile up drastically especially if all you can think of are the rewards and cashback points. Once these bills pile up, it will be more difficult for you to pay. Sometimes you will be left wondering if those cups of lattes are worth the interest rates charged to you.
How to avoid credit card debts
- Pay the balance in full every month – Don’t be satisfied with just settling the required minimum payment each month. Settling the total bill will save you from interest fees.
- Pay on time – Due dates are important, and if you can pay before, then you have more significant chances of being saved from paying default interest charges which are almost double the standard rate.
- Limit the number of cards you own – Although having a lot of credit cards could be good for your credit profile, maintaining more than what you can afford to add up to your misery. You will have difficulty tracking your expenditures and you end up more tempted in paying for impractical purchases.
Owning a credit card is a way to organize your spending and manage your financial resources. However, it takes a responsible credit card holder to enjoy its perks to the maximum.