New Grads: 3 Things to Know About Credit Card DebtJun 18, 2018
How much debt is too much? When is it OK to use your credit card, and when should it be avoided?
Gen Z, those mid-90s-mid-2000s young adults are graduating in droves and, unfortunately, with a lot of debt. Student debt aside, funding a lifestyle doesn’t come cheap, especially without a steady income. Items such as a car, laptop, furniture or new clothes for important interviews are a few reasons Gen Z are borrowing faster than any other generation and 80 per cent of that borrowed money is in credit card debt.
That’s why we asked our Licensed Insolvency Trustees (LITs) to offer advice to Generation Z grads in this episode of our podcast. Here’s a preview of the advice they had to offer:
- Use them, don’t abuse them. Be strategic when it comes to credit cards. You want to build up a good credit history, but you also want to avoid adding more debt than you can handle. Income vs consumer debt — it’s a balancing act.
Check out The Good Men Project for more tips that will help young professionals pay off debt.
- Know your limit. It may be tempting to apply for multiple credit card offers. Instead, choose a card that offers cash back or other rewards. Be sure you know the debt warning signs that could signal financial trouble, and know where to go for debt help when necessary. This online calculator can help you compare your debt relief options.
- Build good credit. Use your credit card for recurring monthly expenses such as your cell phone bill, your Netflix subscription or anything else you can easily pay off each month. You’ll build great credit over time and you’ll be able to use your income to save up for those bigger ticket items.