Nearly one-in-four adults with a credit card added to the amount of debt they are carrying on those cards during the month of April, according to a survey that was conducted by CreditCards.com. Forty-seven percent of individuals surveyed said they had a balance on their credit card in April, up from 43% in March, yet another sign of the economic and financial impact that the coronavirus pandemic is having on individuals in the United States.
At the same time, mega-mogul Warren Buffett is advising against individuals using their credit cards as “piggy banks to be raided,” he said during the annual meeting of his company, Berkshire Hathaway. The interest rate on credit cards is too high, Buffett said, recalling an encounter he had with a friend who asked him what to do about her credit card debt.
“I said, ‘What do you owe on your credit card?” Buffett recalled. “And she said, well I owe X. And I said, what you should do — I don’t know what interest rate she was paying but … it was something like 18%.
“I don’t know how to make 18%,” Buffett added. “If I owed any money at 18%, the first thing I’d do with any money I had would be to pay it off.”
Among those who are going deeper into debt during the COVID-19 crisis are members of the Millennial generation, according to the CreditCards.com survey. More than one-third of Millennials have more debt because of the pandemic, compared with 23% of members of Generation X and 15% of Baby Boomers.
Almost half of all individuals with credit card debt are stressed about it, according to the survey.