This post contains references to products from our advertisers. We may receive compensation when you click on links to those products. The content is not provided by the advertiser and any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any bank, card issuer, airline or hotel chain.
Please visit our Advertiser Disclosure to view our partners, and for additional details.Americans owe billions of dollars in credit card debt, and the high interest rates that come with it can lead to a debt spiral that is very challenging to overcome.
Millennials, having lived through the financial crisis and other economic downturns, appear to be more wary of credit cards than other generations, according to several recent surveys from sources including Bankrate and TransUnion. This wariness is healthy, but it’s important for this younger generation to know that credit cards by themselves can be harmless and perhaps even beneficial if used wisely. (See also: Why Millennials Should Embrace Credit Cards)
If you’re a millennial, consider these tips on how to use credit cards while avoiding getting into dangerous debt.
Pay attention to interest rates
Sometimes when you’re in a financial pinch, you may be relieved to see a new credit card application come in the mail. But it’s a bad idea to apply without looking at the terms first. Not all credit cards are created equal, and some have very high interest rates that could cripple you financially. An annual percentage rate of about 15 percent is standard, but some can go well above 20 percent, and it’s possible to find rates below 12 percent. Be sure to read the fine print on all cards, and compare rates to find the best card available for you. (See also: Best Credit Cards for Millennials)
Also, don’t get too enamored with low introductory rates; remember that all introductory rates eventually aren’t introductory anymore. If you’re struggling to get out of debt, it may be helpful to transfer a balance to a card with a 0% introductory APR, but be aware that rate will jump after a certain amount of time. (See also: The Best 0% Balance Transfer Credit Cards)
Avoid fees
Some credit cards will charge you an annual fee just to have them. Sometimes, this annual fee allows you to receive special benefits, but the average person should never feel the need to pay money just to have access to credit. You may feel like you’ve “arrived” because you are spending $550 per year for that platinum card, but it’s a silly expense if you’re only using the card to pay for lunch and fill your gas tank. These…
The post The Millennials Guide to Avoiding Credit Card Debt appeared first on FeedBox.