After more than a year of lockdown, Gen Z has become more comfortable with the idea of ââcredit card debt, Bankrate credit analyst Ana Staples said.
According to a study by creditcards.com, 56% of Generation Z are ready to take on debt after the pandemic. However, in 2020, half of Gen Z had no debt outside of student loans, Staples said.
Bankrate public relations specialist Chelsea Hudson said Bankrate is a personal finance company that helps people solve their financial problems. Hudson said the company aims to educate students on topics related to personal finance and endorses Staples’ knowledge of financial well-being.
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Staples said she is worried about the financial stability of Gen Z now that life is slowly returning to normal.
âAs we come out of this pandemic, young people seem to be prone to risky credit behavior because there is this demand to get out and have fun,â Staples said. “Young people can’t wait to get out, spend their money and get into credit card debt.”
According to a Discount rate article by Staples, Gen Z has become prone to âtravel feverâ. This means that young people are willing to spend more money on travel. About 40% of Gen Z said they plan to spend more on travel in the second half of 2021, Staples said.
Staples advises against unnecessary spending on things like travel, because credit card debt can hurt financial health if left unmanaged.
âI think Gen Z should be very careful with debt, and I encourage them to use credit cards with care and educate themselves on the resources available,â Staples said. “We’ve found that most Gen Zers get their personal financial advice from social media and 22% don’t get any financial advice at all.”
Staples said it’s important to set spending limits when budgeting. It is essential that young people consider budgets to create healthy financial habits, she said.
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Staples said it recommends students seek advice wherever they can, but to make sure information is gathered from reliable sources. Staples said the earlier these resources are used, the better off Gen Z’s financial situation will be.
Although Gen Z has proven to be more comfortable with debt since the pandemic, some UI students, like sophomore Kendall Henderson, appear to be as suspicious as before.
âI think credit cards should be used primarily if you can afford to pay them off at the end of each month, especially if you’re a student,â Henderson said. “Otherwise, you’re just digging yourself a hole.” “
Claire Dickey, product editor at Bankrate, said students should also be educated in financial literacy to protect themselves from dangerous spending habits. It’s best to set aside time each month to review your finances to protect financial stability, she said.
âReview your bank account and credit card statements each month to make sure your spending is within your budget, as well as any other accounts you save, spend and invest,â Dickey said in a statement. item.