Ways to mitigate credit card use during inflation

Published: May. 16, 2022 at 7:00 AM EDT|Updated: May. 16, 2022 at 7:04 AM EDT
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RICHMOND, Va. (WWBT) - Credit card balances fell by $123 billion in 2021 - that’s a drop of 14%.

Elizabeth Renter a data journalist with NerdWallet says there are many reasons people were able to pay down their credit card balances over the last year.

”People were spending less money on things like entertainment, travel, childcare, but also some of them had supplemental income, like the child tax credit and stimulus checks from the federal government,” said Renter.

She adds that people are spending their money again, but items cost a lot more now. This means people are likely to turn their credit cards again.

Renter says to be strategic about how you use your credit cards. If you can pay off any purchases you put on your card within a month before you accrue interest.

“That isn’t always possible. If you hit financial stressors like you’re out of work or you have an unexpected bill, come in. If that’s the case, it’s ok to temporarily make the minimum payment, right. That’s why it’s there,” said Renter.

Even if you are only able to pay the minimum, for the time being, Renter says pay it on time.

She says you don’t want to be reported to a credit agency. You don’t want to deal with penalties on top of interest.

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