The Truth about Credit Cards

Today’s young adults will most likely never pay off their credit card debts. I don’t want my kids to be a part of that group, and I don’t want you to be a part of it either, dear Germ readers. So what is causing it and how can you avoid it?

According to this article in Time Magazine, rent is the number one reason why today’s 18–24-year-olds cannot get ahead with their debt. The rising cost of food and transportation in contrast to falling wages makes this even more of an issue.

It used to be that you could make a decent living without a college degree, but nowadays that’s not always the case. When you do go to college, though, the price tag burdens you with debt close to $100,000 to add onto the already high cost of living. The gap between the haves and the have nots is growing — and so is the debt total.

So how do you avoid this insurmountable debt?

Only have one credit card that you dedicate to use for something each month, such as gas for your car. Pay it off every single month. That way you establish credit should you ever need it — such as for buying a home with a mortgage — but, by carrying no balance, you don’t pay the interest fees and you don’t risk going into debt.

Another option is to have many roommates so that the cost of rent is lowered. Or, you could do as many youth do and live at home longer than the previous generations did.

Other things to ask yourself: Do I really need that purchase? I cannot tell you how many times I’ve put things in my cart only to tally things up in my head and put them back once I’m near the checkout counter. There is an ocean’s worth of difference between a “need” and a “want.”

If you are already in credit card debt, call the credit card company and negotiate a better rate. This is a much better response than just paying the high rate over and over each month and never making a dent in the debt.

Finally, save up for things you want, such as a vacation or a cool new purchase. I promise that you will value that item more if you save up for it and pay it off in full instead of going into debt for it.

The “cash only” mentality is ultimately empowering, and it will help you in your old age to not be stressed out and burdened by a lifetime of debt. Living free means living within your means.

 

Jerri Sparks is a single mom (of three teens and one pre-teen) living in Western New York.  A former Congressional press secretary and a UCLA alum, Ms. Sparks now works in the BioPharma Research industry by day and is a freelance writer by night, advocating for the things she’s passionate about.  This may or may not involve Wonder Woman. Contact her at jerri@germmagazine.com.

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