Credit card debt is quite common in the developed world. For instance, in New Zealand, 41% of the population holds some kind of credit card debt. However, holding credit card debt is not a big deal, what’s interesting is how people spend this money. According to Credit Cards Compare NZ, one in three New Zealanders are willing to take on debt to go on a holiday. Interesting, right?
However, this doesn’t mean that the average New Zealander will load up on credit card debt and go on holiday. There are gender and generational aspects to it. According to research by Credit Cards Compare, Generation X is more likely to take a credit card debt for a holiday than millennials and baby boomers. In specifics, the research found that 48% of generation X is willing to take credit card debt and go on holiday. That’s much higher than the baby boomers and the millennials, whose numbers stand at 18.18% and 31% respectively.
As for gender, the research found that women were more likely to take up credit card debt for a holiday than men. The research found that 36.67% of women are more likely to take up credit card debt for holiday, as compared to 29.91% of men. But that’s not to say that men are likely to be more prudent in their use of credit card debt either. The research found that while women are more likely to take on credit card debt for holiday, men are more likely to spend on things like high-value televisions and other big-ticket items. This cancels out with the women who are likely to use their debt on holiday.
One key inference that one can draw from this research is that a significant segment of the NZ population is willing to spend credit card money on leisure. This is not a bad thing since it keeps the individual happy, and the economy moving. However, for a person taking such debt, the key thing to understand is how to keep it at manageable levels. One of the best ways to stay happy, and stress-free even when taking credit card debt is to repay it promptly. For instance, if you take it to go on holiday, make sure to repay it quickly once you get back. The idea is to avoid an accumulation of interest rates, something that can negatively impact on your finances.
The second step is to avoid taking on debt from multiple credit cards companies. That’s because you will be paying for multiple high-interest rate loans. In the event that you find yourself with multiple credit card, the first step you should consider is to consolidate that debt into a single loan. This will make it easier for you to keep up with the payments, since you can plan your finances around a single repayment. It’s the best approach to avoid a scenario where credit card debt ruins your credit score. Nonetheless, living within one’s means has always been the safest bet to a happy and stress-free life. You also progress faster, because you have the leeway to save and invest.