NJ: Are you playing the credit card ‘blame’ game?

💳 Nearly half of Americans are in credit card debt, according to LendingTree

💳 Most claim it was out of their hands

💳 Younger generations blame their parents for their credit card debt

Credit card debt. It’s common. Most people have it. But have you heard about the credit card blame games and more importantly, are you playing one of them?

A new survey from LendingTree outlines the three major credit card blame games among Americans.

Credit Card Blame Game #1

The survey found that while 47% of Americans have credit card debt, 60% of them believe factors beyond their control caused it, and therefore, it was not their fault.

People blamed the economy, the COVID-19 pandemic, and the federal government for their credit card, said Matt Schulz, chief credit analyst at LendingTree.

“The economy and specifically stubborn inflation, obviously plays a role because it makes it harder for Americans to pay their bills, leading many into debt and deepening the debt hole for others,” Schulz said.

For those blaming the pandemic, he said the effects continue to ripple through Americans’ finances, especially those who still face medical issues.

Drilling deeper into personal factors, 31% blame their lack of financial discipline, 25% point to medical emergencies, and 24% cite raising children as the reason for their debt.

Credit Card Blame Game #2

Financial education could be the key to financial discipline as an adult. The survey found that 57% of Americans with credit card debt believe they would not be saddled with it if they had received better personal finance education earlier in life.

This was an interesting statistic, Schulz said, but the good news is that more and more people are talking about personal finance these days.

“But also we’re seeing more and more states integrating personal finance content into their curriculum for high school students, for example, so it’s really important that people learn these things early on. There’s no question about that,” Schulz said.

The tide is turning a bit in terms of making sure that more people are exposed, he added.

The survey found that younger generations are especially likely to say they’d have benefitted from personal finance education. 69% of millennials agree, followed by 68% of Gen Zers.

Credit Card Blame Game #3

Mom and dad get blamed for pretty much everything from their kids, right? Well, add credit card debt to that list of blames.

Almost 32% of Americans with credit card debt blame their parents, saying their parents’ financial situation set them up to be in debt, according to the LendingTree survey. More than half of Gen Zers (52%) and 44% of millennials blame their parents, said Schulz.

“There’s no question that your family’s financial situation has a real impact on you in so many different ways when you’re starting off, and through a lot of your life, but it is very interesting for the youngest among us to be the most likely to blame their parents for their credit card debt,” Schulz said.

He added that when parents are open about their finances, it helps lift much of the fear and many of the taboos around money. Parents need to set good financial examples for their children.

Credit Card Stress

Regardless of who or what people blame for their credit card debt, the majority are stressed about it. 72% of Americans are stressed about their debt, the survey found. Nearly half (49%) expect to pay off their debt in a year or less, which Schulz said showed the debt is somewhat manageable.

However, 18% say it will take them more than five years to pay off their credit card debt.
To help knock down that debt, the first thing people should do is get the interest rates on their cards under control, Schulz said.

“You can do that through a 0% balance transfer card, consolidating with a low-interest personal loan, or you can even call your credit card issuer and ask them for a lower rate on that card. That works a lot more often than people imagine,” Schulz said.

Another way to reduce credit card debt or to stop the cycle of debt is to save money while paying down the debt.

Schulz said it’s imperative to do both at the same time.

“That’s because if you pay your credit card balance down to zero and you don’t have savings, that next big unexpected expense is going to go right back on your credit card and you’re going to be right back into debt,” Schulz said.

If you have a little bit of savings, that can help. You can pay in cash and not put expenses back on the card.

“It’s not the easiest thing to do. It may end up taking a little bit longer to pay off and you may pay a little bit more to get rid of that debt. But in the long run, it’s worth it,” he said.

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