Credit cards allow people to build a good credit scores while purchasing everyday products, but the trend seems to be working against many Americans. Recent surveys showed that Americans are dying with more credit card debt and that number is supposed to increase over time, according to Pymnts.com. Younger generations have significantly more debt than those of their parents and grandparents, according to the the Ohio Economic Survey and Consumer Finance Monthly surveys pulled from a university professor and an economic strategist. Combining data from both studies has allowed these experts to notice a pattern with consumer credit card debt.
Debt rising significantly
Those who have passed more recently have reportedly died with a considerably higher amount of credit card debt than those of previous generations. Experts predict that coming elderly generations will have even more debt due to more credit availability in modern times. The rising amount of credit card debt is not a good sign and may have future implications for the economy and banks. Utilizing cash and check options is one option banks and credit unions can advocate to help members manage their finances more responsibly.
What financial institutions can do
In order to encourage more responsible consumer behavior, financial institutions can raise the minimum payoff rate, according to Pymnts.com. This will help keep members more in line with their money managing abilities and help them recognize when they will or won't have enough in their account to pay their balance. But other options are available too. Offering financial management education courses and working with members to discuss savings and checking account options are all beneficial to today's consumers. Banks and credit unions can also offer self-service coin counting machines so all members can start saving early and making every penny count. Plus, encouraging debit card, check or cash use may help solve the credit debt issue.
When assisting members on credit card issues, it's best to help them take a closer look at their overall finances. The Denali Alaskan Federal Credit Union suggests members take a look at how many credit cards they have hold of and eliminate the ones not in use or that are causing a financial burden. Additionally, It can be a smart idea to help customers research the best credit card options beforehand and help them work off the debt in a smart and efficient manner. Providing expertise and additional banking services will help consumer behavior and may lead to less credit card debt in years to come.
October 11, 2013