Credit Cards: Know This Before You Apply or Swipe
Credit card debt in the U.S. is at its highest ever, and younger adults continue to fall into this debt cycle. Understanding how credit cards actually work enables you to avoid the stress many silently endure. Your credit card habits impact your financial opportunities later, such as renting an apartment, financing a car, or even qualifying for lower insurance rates.
Swiping More Than Ever
Americans’ total credit card debt hit $1.233 trillion in the third quarter of 2025—the highest since the Federal Reserve began tracking it in 1999 (Shulz & Sheppard, 2025). On average, Gen Z owes about $3,500 in credit card debt, millennials roughly $7,000, and older generations between $6,700 and $9,600 (Horymski & Mountjoy, 2025).
This post isn’t about judging your parents or grandparents’ spending, though. It’s about understanding that rising debt often comes from a mix of factors, such as daily expenses, unexpected medical or car bills, job loss, and emergencies that force individuals to depend on credit to get by. Still, credit cards usually have high interest rates, which can cause balances to grow rapidly, especially if only minimum payments are made. This can hurt your credit score, making future goals more expensive or harder to reach.
The “Just This Once” Trap
Imagine you put $500 on a credit card with a 25% interest rate and only pay the minimum each month. That balance can take almost 5 years to pay off, costing nearly $400 in interest, which is almost the same as the original purchase price. This is how many people gradually build up long-term debt without realizing it.
Smart Credit Habits to Build Your Future
View Your Budget Before Applying for a Credit Card
If you need “extra wiggle room,” begin by examining your spending habits. Sometimes, small adjustments can free up cash without the need to borrow.
Shop Around for the Lowest Interest Rates
Many trusted personal finance sites compare credit card offers based on your credit profile.
Read Every Offer Carefully
Know the terms before you sign up. A list of credit card terms you should know includes, but is not limited to, annual fees, introductory APR versus APR versus penalty APR, balance transfer, billing cycles, cash advance, credit limit, grace period, minimum payment, and any late payments or other fees (McClanahan, 2022).
Pay More Than the Minimum (Or Pay in Full)
Budget to pay more than the minimum or even pay in full to decrease interest and help you pay off your balance faster.
Grab Your Free Budget Template
Use Your Card Sparingly
Keep credit for emergencies or purchases you’ll pay off immediately, especially if you’re trying to build credit history or earn small rewards.
In the End
Credit cards aren’t “bad”—they’re tools. When used wisely, they help you build the credit profile you’ll need for bigger goals. If used without a plan, they can make adulthood more stressful than it needs to be. You have so much ahead of you; let your credit habits support your future, not complicate it.
Disclaimer: Creek & Lyells Financial Literacy Foundation does not provide financial services, nor does it recommend or advise visitors to open accounts or buy or sell securities. All content on this blog is for educational purposes only. While we strive to provide accurate, relevant, and well-vetted information, visitors should consult a licensed financial professional and carefully evaluate the risks of any financial decision before taking action.