LOUISVILLE, Ky. (WAVE) – Every day, WAVE News viewers share their worries about their families and finances.
One trap you don’t want to fall into if you’re doing your best to make ends meet is whipping out your credit card to pay for something you might want or need.
The pandemic may have been a wake-up call for many Americans. While credit card debt in the United States has decreased from 2020 to 2021, credit card users should be aware that carrying over a balance from one month to the next can cost a lot of money in interest. over time.
Doug Milnes, Head of Marketing and Communications at MoneyGeek, pointed out that credit cards and credit card debt are an important part of your financial picture.
“It’s important to use your credit card responsibly,” Milnes proclaimed.
A MoneyGeek study found that the average cardholder in the United States still had $5,668 in credit card debt in the second quarter of 2021, between April 1 and June 30.
The good news, Kentucky and Indiana are among the states with the lowest average credit card debt.
“The average credit card debt in Indiana is $4,651,” Milnes explained. “So that’s less than the national average and Kentucky is also in a similar position with credit card debt averaging $4,521.”
Credit cards have helped some Americans through the pandemic, but credit card debt has the highest interest rate of all the debt you owe. Many Americans have no idea what interest rate they are being charged on their credit cards.
“Credit card debt is the thing that can really spiral out of control if you don’t manage it tightly,” Milnes said. “Your credit card has the highest interest rates of any debt you’ll ever have, whether it’s your mortgage, car loan, or student loan.”
Debt and weight management are two of the most popular New Year’s resolutions and two of the biggest issues facing millions of Americans today.
“There are actually a lot of strategies you can use that you could use on a diet to manage your finances and stick to your budget,” Milnes explained. “It’s important to have that kind of mindset, like, I’m going to go on a diet. I’m making myself healthier.
Inflation is outpacing income growth right now, so many Americans are struggling to make ends meet.
To get your credit card debt under control:
- Pay more than the minimum if you can.
- Create a budget and stick to it.
- Lock up credit cards except in an emergency.
- Stick to cash or, if necessary, a debit card.
- Set a target date to be debt free.
The worst thing you can do is stick your head in the sand and ignore calls from credit card debtors.
“There’s this thing called the ostrich effect, where psychologists have found that people want to avoid bad news and they do things like not opening their mail if they know they have a big bill to come,” Milnes said. “Face your financial situation head-on.”
MoneyGeek breaks down data by age, location, income, and race/ethnicity. See more key findings on its website by clicking or tapping here.
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