Page 26 - Payne Research Center ~ Money Matters

P A YN E C E N T E R . OR G
The potential long-term costs of carrying high credit card balances can be staggering. As the data from Peterson and Comoreanu (2024) and Schulz and Shepard (2024) illustrate, even a relatively modest credit card balance can accumulate a significant amount of interest over time, leading to a total repayment amount that is far greater than the original debt. This example underscores the importance of understanding the power of compound interest and the potential consequences of making only minimum payments on credit card debt.
For college students, who often have limited incomes and face competing financial demands, the burden of high credit card debt can be particularly challenging. It can lead to increased financial stress, hinder their ability to save for future goals, and even impact their academic performance. Therefore, it is crucial to educate students about the importance of responsible credit card usage and the long-term implications of carrying high balances.
Financial instability and stress, often associated with credit card debt and high-cost loans, can significantly impact mental health outcomes. A 2024 Debt.com survey found that 38% of participants across age groups felt stressed after using their credit cards, with Gen Z reporting the highest level of credit card- related stress at 47%.
In addition, 44% of Gen Z respondents felt stressed when reviewing their credit card bills. Individuals experiencing financial difficulties are more likely to report symptoms of depression, anxiety, and psychological distress (Richardson et al., 2016), which is disproportionately pronounced by African American and Latinx youth (Deckard, Goosby, & Cheadle, 2022).
PAYMENT OVERDUE
OVER DRAFT FEES
INTEREST
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