FOX – WOFL
Credit card debt is a growing problem for younger Americans, one that may follow them all through their life. In a first-of-a-kind study released earlier this month, two Ohio State economists found that people in their late 20’s or early 30’s are not only taking on more debt, but they will likely die in debt.
So what does this study say about the younger generation?
The Ohio State study shows people born between 1980 and 1984 have, on average, more than $5,000 more debt than their parents’ generation, and more than $8,000 more debt than their grandparents’ generation. Alarmingly, these young adults may keep adding to their credit card debt well into their 70’s, and could even die with money still owed on their credit cards.
What can people do to get out of debt?
- Step #1 | Pay on time: If you can afford to, pay off your bills in full. That way you can avoid paying interest. If you can only make smaller payments, at least pay them on time. You don’t want late fees to add to your debt.
- Step #2 | Prioritize your payments: Look closely at your debts to find out which charge the highest interest rates. Look especially close at credit card bills. Different types of charges often come with different rates. Paying more on the higher-interest debts will reduce your overall debt faster.
- Step #3 | Get a lower rate: Shop around for a lower rate so you can transfer your balance. And, tell your current credit card company you’re doing it. They may be willing to lower your interest rate to keep your business.
- Step #4 | Ask for help: The credit card companies want their money back. So, they’re often willing to work with customers to make it easier to pay down debt. If you’re overwhelmed, ask about setting up a repayment plan.
- Step #5 | Stop adding to the problem: Paying off debt doesn’t do you much good if you just create new debt. I work with clients to help them track their spending so they can see where it all goes. Then, we go back and cut out what isn’t worth the cost. I also help them to make it harder to buy on impulse. Removing credit card numbers from online stores forces you to type it in each time you buy something. That extra step will give you time to reconsider.
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