Two in five Americans believe credit card debt is embarrassing, according to a report by NerdWallet. Yahoo Finance Live breaks down the report and the percentage of people hiding their credit debt from their parents.
Video Transcript
SEANA SMITH: One of my stories and that's credit card debt, not specifically the overall debt level here in the US, but more so how people view credit card debt. Now, some interesting things, this is from a recent study, a report out from NerdWallet.
Right now, average American household has about just below $10,000 in credit card debt. But people are ashamed of the debt that they hold. About 2 out of 5, 40% of people saying that they aren't totally honest. 43% saying that it's OK if your partner doesn't know all about your credit card debt. Not exactly advice that I would give to people who are in a relationship.
JOSH SCHAFER: Interesting too to see 39% of Americans say that they withhold it from their parents. You would think that your parents would be someone that maybe have gone through a similar situation or at least have had to deal with some level of finance more than you at that point, and you would maybe lean on them.
I do get the part of people being uncomfortable about it. That totally makes sense. People don't really like talking about finances in general, right? That makes sense. But you do kind of have to turn to someone you would think. So interesting to hide it from both your partner and your parents, who are probably the people you normally confide in.
BROOKE DIPALMA: But I think taking a step back thinking of larger picture, the stigma that just surrounds credit card debt, people are ashamed of just how much debt. $10,000, to be honest, not that much of debt certainly concerning. But at the same time, I mean, there are ways, there are opportunities to certainly fix that, alter that debt.
I mean, I was reading some ways to avoid interest charges, pay your balance on time, establish and stick to a credit. In addition to that, auto payments are now out there. Maybe buy now pay later. But people certainly ashamed. I mean, we also noted that one-third of married Americans with car debt haven't told their spouse exactly what they owe. And so the stigma largely still holding on Americans' wallets here.
SEANA SMITH: Yeah, they certainly are. And there was also a larger percentage than I ever would have guessed. I forget it off the top of my head just how many people said that. It's OK if you have a credit card that your spouse or your significant other doesn't even know about.
BROOKE DIPALMA: That was concerning.
SEANA SMITH: That's not necessarily, I don't think the smartest step to take when it comes to how to handle financials at least together.
But Josh, you brought up an interesting point and that's a number of people that are hiding their credit card debt from their parents. You would think that they'd be able to turn to them to help. On the flip side, so many parents are honest with their kids just about their financial situation, almost, what, 3/4 of a percentage. So 75% of American people who have younger children are saying that they are totally honest.
So we think that if you are one of those people who are suffering with the credit card debt, it would make a heck of a lot of sense to turn to people who have years of experience and how to best handle it.
JOSH SCHAFER: I do like to being honest with your kids part too, right?
BROOKE DIPALMA: Yeah.
JOSH SCHAFER: Because it's helpful.
BROOKE DIPALMA: Transparency.
JOSH SCHAFER: Well, it's helpful that you--
BROOKE DIPALMA: It's learning. Exactly.
JOSH SCHAFER: You don't learn it. You don't learn credit card debt in school. You don't even learn how to write a check in school. So it's nice that people are actually doing that at home and giving that level of personal finance education that I don't think we really get in schools.
So it's good to see parents doing that part of it. It'd be nice for the kids to then maybe reciprocate it, and ask the teacher a question or two, right? Make sure you're doing well on the homework.
BROOKE DIPALMA: Yeah.
JOSH SCHAFER: But it's nice to see parents at least doing that.
SEANA SMITH: And I think it's all just about having these conversations. Starting them is so key and starting them young. And maybe people don't feel comfortable talking to their parents about it because their parents never talk to them about it when they were younger. So starting that conversation as young as possible, I think, with your children is going to help me to address some of these types of issues.
BROOKE DIPALMA: Right.
