A recent survey from financial advice website Credible reveals the one thing that scares Millennials the most: having a credit card debt.
You hear it right. Taking majority of the pie’s share at 33.2 percent, having high credit card obligations scare millennials more than death which only made up 20.4 percent of the responses.
The survey was participated by 500 Americans who have existing credit card debts. About 33 percent said having a debt is the scariest aspect of their lives.
Other respondents cited death (20.4 percent), war (16.8 percent), working forever (11 percent), and 6.4 percent said climate change. A good 12.4 percent of those interviewed causes other than those above.
Check out today’s rates!Worried but confident
The survey also asked millennials some follow up questions such as how they got into debt in the first place. About 34 percent said it was due to some emergency expense, 32 percent said it was because of some one time, expensive expense, and 4 percent said they willingly chose not to pay their dues despite having the finances to do so.
When asked if they have a plan to handle their debts, about 80 percent confided that they are confident they can eradicate their debt within the next 12 months.
Having a credit card can be a good financial tool to help a borrower build his or her credit. However, it can easily be abused by holders who have no definite spending plans. If you have existing credit card debts, experts suggest you take these actions to help you get back on your feet and reduce your liabilities:
- Pay off your debts. If you don’t have the financial capacity to pay for them all at once, start with your smallest debt until you successfully pay it off. Do the same with your other debts until you erode your obligations, one at a time.
- While in the process of paying off debts, try as much as possible to limit your spending. Do not spend more than your available credit as that will ramp up your utilization ratio. This is a red flag for lenders if you’re planning on taking major debts (e.g. mortgage, car loan) in the near future.
- If you can, pay off your balances in full every month to avoid accruing interest payments.
Not impossible
Handling credit card debt can be daunting but it’s not an impossible task. The best guard against having high debt is responsible spending. The best way to spend responsibly is to have spending plan in place. Of course, that requires a huge amount of personal discipline especially today when every button, page, or site you visit tempts you to purchase. It may require practice and a thorough evaluation of your own financial capacity. Learn to prioritize. Put your needs first and never forget to save for the future and for emergencies.
Ideally, credit cards are only good for minor purchases. Keep your liquidity. If you can, spend cash before you turn into credit and always examine the facts first before you decide to obtain certain heavy purchases.
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