Consumers can't pick one because there are too many choices
There’s no such thing as the perfect credit card, but shoppers will still hunt for it.
Most credit card users aren’t happy with their current cards and will keep looking for new ones, hoping to find one with better rewards than the ones they have now, according to a survey from Experian.
The biggest perk consumers want is to use a card without paying for it. The Experian survey says 54 percent of respondents don’t want an annual fee. Another 45 percent want a rewards program, like cash back, miles, or others. The biggest rewards consumers want is cash back (90 percent) and gas (74 percent).
The desire to have a different credit card might be because consumers aren’t aware of what they’re getting when they sign up for their current one. Nearly 70 percent of respondents say they didn’t know what they signed up for before applying for their current cards. That’s a huge number (and a huge problem).
Is it surprising? Not really. The vast majority of Americans don’t even read their credit card contracts before signing up for them. Many of us don’t know the difference between zero percent and deferred interest, which costs us so much more than we realize over the long run. Overlooking our contracts — whether out of laziness or because we can’t comprehend them — is putting us further in debt than just simply using the credit cards.
Minimum knowledge = maximum problems
The lack of investment in our credit cards before we even get them eventually sends us into credit hell. For residents in Alaska paying off their credit cards with the minimum balance every month won’t see their cards paid in full for more than 20 years. The average credit balance there is more than $4,000.
The most vulnerable might be millennials, who say they’re afraid of their credit cards. To them, cards are scary because it can put them further into debt. This is on top of their mountains of student loan debt. Lack of knowledge of how to properly and effectively use credit cards is probably the cause. Remember that credit cards are to help you build your credit history to show creditors and lenders that you are responsible with money. They best way to show that is to effectively do it.
The group that seems to love credit cards the most are baby boomers. Soon, it’ll be Gen Xers. That’s because the older you are, the more you love your credit card. Good credit usage is the best thing to boost your score, and the older you are, the more likely you are to know best credit card practices.
If you’re drowning in credit card debt, there are a few ways you can come up for air. Start by paying off more than just the minimum payment (a lot more). Don’t pay all of your debts at once; pay off one at a time and start with the highest interest rate. Eventually, your debts will start to pay off, giving you more money to pay the next debt faster.
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Article last modified on November 20, 2017 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Credit Cards Everywhere and Not One to Use - AMP.