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Survey reveals millions of credit card holders overspend, carry debt to earn rewards

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A new survey reveals that credit card users who carry debt from month to month claim they are overspending to earn rewards.

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Credit card companies will sell users on thousands of airplane miles, points for vacations, or cash back on everyday purchases.

Among those who carry debt from month to month, seven out of 10 people say they are trying to earn rewards, according to a new Bankrate survey.

One in four of those people say they make every effort to pursue rewards, but Bankrate Senior Industry Analyst Ted Rossman said this is a risky strategy.

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“If you’re overspending to get credit card rewards, or if you’re paying interest. It may sound like a freebie, whether you’re getting cash back or airline miles or hotel points, but you really have to stay on budget, and you have to avoid interest for this to be worth it,” Rossman said.

Bankrate keeps track of all the credit card debt in the U.S. Their data shows that six in 10 people with debt have had it for at least a year.

More than half of all card holders say it’s getting harder to pay off the debt, according to Bankrate.

If somebody has $6,600 worth of debt, it will take them 18 years to pay off with minimum payments, as reported on News Center 7 at 5:30.

Xenia resident Kyla David said she uses her credit card to earn gift cards, but only when she can pay off her balance to reduce that risk of debt.

“I only use my credit card to how much money I know I have, so I’m not overspending and trying to put a whole bunch on my credit card. If I don’t have money for it, I don’t need it,” David said.

The survey shows young adult card holders believe the rewards are worth the risk. Nearly nine in 10 card holders between the ages 18 and 28 say they try to collect rewards.

“A lot of people get into credit card debt because of medical bills and car repairs and day to day expenses. It’s usually practical stuff, but it’s a tough cycle to break, so you definitely want to take a good look at what money is coming in, what’s going out, and come up with strategies to pay it down,” Rossman said.

If you have a large credit card balance, Rossman said transferring to a zero percent interest card or consulting with a non-profit credit counselor are your next best steps.

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