Many millennials in Ohio and throughout the country have student loan debt. However, a study from Northwest Mutual found that credit card debt may be hindering their ability to save for the future. Credit cards can come with interest rates above 20%, which is significantly higher than what a person would likely pay to finance the purchase of a home or car. That is also higher than the interest rate charged by most student loan companies.
The study found that 20% of millennials don’t even know the interest rate on their credit card balances. Research has found that younger debtors use their credit cards to pay for food and travel. They typically begin using credit cards because they received applications in the mail. It isn’t uncommon for millennials to have as many as four credit cards with balances on them at the same time.
There are many ways in which an individual can pay down a credit card balance in a timely manner. For instance, it may be a good idea to consolidate the debt with a personal loan. It may also be possible to transfer an existing debt balance to a new credit card that won’t charge interest for 12 to 18 months. Those who have credit card debt are encouraged to make more than the minimum payment each month.
Individuals who are struggling to pay off outstanding credit card debt balances may want to consider filing for Chapter 7 bankruptcy. In a Chapter 7 proceeding, an individual may be able to have an outstanding debt balance discharged in full. Other potential benefits of bankruptcy include an automatic stay of credit contact. This means that a creditor won’t be able to contact a debtor by phone or through the mail without permission from a debtor.