Are Americans afraid of their credit card debt?

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Ask a consumer about their credit card debt and, more likely than not, you’ll end up talking to the proverbial stone wall.

It’s not exactly a shock, because Americans and personal finance have always been a taboo subject. Yet with the siren of inflation at full blast and the clouds of recession rolling in, American credit card holders not only avoid talking about card debt, they’re even afraid to look.

Concrete example.

According to a new study by Upgraded Points that aimed to take a “behind the scenes” look at consumer credit card behavior, 20% of respondents are “afraid to check their credit card statements.” More women than men said they were afraid to check their credit card statements, almost 10%.

Here are more study findings that underscore the high anxiety cardholders feel about their plastic debt.

· More than 1 in 5 (22%) would rather someone read their text messages than their credit history.

· Nearly 1 in 4 (24%) would rather go to the dentist than share their credit history with their partner.

· 82% of baby boomers would rather their credit card debt disappear than their student loan debt, compared to 64% of Gen Z who would rather their student loan debt disappear than their credit card debt.

Fear Factors

Why are so many credit card holders reluctant to face their card debt head-on? Remorse over overspending drives this list.

“Many credit card owners in the United States are afraid to look at their credit card statements because they know they’ve overstretched themselves when using credit,” said Annette Harris, founder of Harris Financial. Coaching, in Jacksonville, Florida. “When cardholders receive their statement, they tend to overlook the fact that they have to pay by credit card to deal with the anxiety of spending issues. However, the bill is still due, and that makes it worse. their money problems.

It’s not a good habit to get into because ignoring credit card bills leads to much bigger problems.

“For example, a big issue with avoiding a credit card bill is that it may affect their ability to get a home loan in the future,” Harris said. “When mortgage lenders look at a homeowner’s credit history, they will know that the individual is not paying their credit card bills. This can, among other things, destroy or delay their dream of home ownership.

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This is just the tip of the iceberg. For example, a 30-day late payment can have an impact of up to 50 points on a consumer’s credit score.

“In addition to missing a new home, ignoring a credit card statement and missing a payment can hurt your chances of getting a new job, as many companies now perform credit checks as part of the credit verification process. background,” said wealthy Matthew Grishman. consultant at Gebhardt Group, Inc., in Roseville, California. “The financial implications of ignoring your credit card statements are enormous.”

Go to a dark place

Even seasoned finance professionals can relate to the fear and angst that comes with a high credit card bill.

“For most of my 27 years in this industry, I’ve been on the train wreck of a relationship with money,” Grishman said. “A byproduct of that was eventually ignoring my credit card statements, even when I had the money to pay the bill.”

The good news is that, as the article on upgraded points shows, overspenders aren’t the only ones expressing fear about credit card debt. “In that regard, many Americans are on this boat together,” Grishman said.

There is no silver bullet to change the “fear of debt” equation, but transparency can help.

“What helped me change was talking about it openly with other people and not keeping my secret inside,” Grishman said. “We are only as sick as our secrets. As I shared my avoidance of credit card bills, it started to take the fear away. Ultimately, talking about the problem took away the power that fear had over me.

Get your hands dirty

Some practical “hands-on” steps can also eliminate the fear of credit card debt, if done gradually.

“Sometimes it’s easier to bury your head in the sand, but having a good plan for paying off your credit card debt is key,” said Ted Rossman, senior industry analyst at Bankrate.com. “My best advice is to sign up for a 0% balance transfer card, which can pause the interest clock for up to 21 months.”

Other good strategies might include using a low rate personal loan as a form of debt consolidation or engaging with a reputable non-profit credit counseling agency.

“Personal loan rates go down to around 6% over five years if you have good credit, and debt management plans offered by reputable credit counselors often have similar terms and are more widely available,” Rossman said.

Personal finance fundamentals are also important.

“Turbocharge your debt repayment strategy by looking for ways to increase your income and/or reduce your expenses,” Rossman added. “Ideas may include a side hustle, selling things you don’t need or canceling infrequently used subscription services, and less frequent dining out.”

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