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Study: Millions are adding credit card debt during the COVID-19 pandemic

Posted at 8:49 AM, May 06, 2020
and last updated 2020-05-06 08:49:09-04

INDIANAPOLIS — A new study shows that millions of people are accruing additional credit card debt due to the coronavirus pandemic.

Around 28 million people in the U.S. have added to their credit card debt as a direct result from the COVID-19 outbreak. That's according to a recent report by creditcard.com. Experts say it's OK to give yourself a little break given the circumstances, but there are some ways to be strategic about your future."

Peter Dunn is a pro when it comes to planning finances, but he said right now is not the time for that.

"I think the key right now is just to frankly survive, which is not really the message of financial planning, in general," Dunn said. "You are supposed to take what you earn and build on that, but this is just not the time for that. This is the time to accept that you may have to go into debt."

Millennial credit card holders are being hit the hardest with more than 30% going farther into debt due to the virus.

Dunn said the best way to handle credit card debt right now is to do your best to stay on top of minimum payments and pay away or pay off what you can.

"The key is here if you're not spending like you used to on dining out or on fuel for that matter, make sure you're not just leaving that money alone in your checking account," Dunn said. "Go ahead and transfer it to your savings account or use it to pay down debt because there's a difference between not spending money and saving money, and I think that's a big adjustment for most folks."

Another tip is to cut spending where you can. You might be tempted to seek some emotional relief in consumer spending right now, but being frugal right now will save you in the long run.