Americans are ready to start spending money to treat themselves — and 44% are willing to go into debt to do it, a report from CreditCards.com finds.
Millennials, ages 24-40, are most likely to take on more debt (59%) followed by Gen Zers, ages 18-24, coming in at 56%. Only 40% of Gen Xers, ages 41-56, and 32% of baby boomers, ages 57-75, said the same.
When it comes to what respondents are willing to incur charges for, car purchases and other automotive spending topped the list.
More than two-thirds, or 67%, plan to spend money in the second half of the year, with travel and out-of-home entertainment the most popular purchases.
Everyone is entitled to treat themselves after enduring the Covid-19 pandemic, said Ted Rossman, senior industry analyst at CreditCards.com.
"You can go out and splurge a little bit," he said "Do it with savings.
"Don't go into debt for it."
Credit card interest rates are creeping higher, with the average card charging over 16%. If you don't have a great credit score, you can easily be paying 20% to 25%, Rossman noted.
If you do want to spend, do some legwork first to figure out a realistic amount.
List your financial goals on a spreadsheet, including long-term ones like retirement savings, said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, California.
Once you have that financial goals list, start with a choice that isn't going to break the bank. Save a bit each week or month until you can pay for it.
"Getting into debt just snowballs into bigger financial anxiety and excess interest payments down the road," said Sun, a member of the CNBC Financial Advisors Council.
If you have a rewards credit card, using it responsibility — by paying it off each month — may help you earn points towards airfare, hotel or car rental. If you incur debt, that may outweigh the rewards.
If you need to carry a little debt, Rossman suggests getting a card with a zero percent promotion. Stick with paying it off, without adding new purchases to the card.
Another option is hybrid programs, like Citi Flex and American Express Plan It, that allow cardholders to pay off certain purchases in installments. You get a specific timeline and usually lower interest rates.
"That can be something that lowers your interest bill and psychologically avoids that minimum payment trap that can drag on," Rossman said.
Before you start getting back into old habits, consider how your financial situation may have improved during the pandemic if you were fortunate enough to keep your job.
Over the past year, Americans have actually lowered their debt and saved more money.
Total credit card balances fell to $770 billion in the first quarter of 2021 from $927 billion at the end of 2019 — a 17% drop, according to the New York Federal Reserve. Meanwhile, the personal savings rate also hit record highs during the pandemic, hitting 33.7% in April of 2020 and is still considered high a year later, at 14.9% for April 2021, according to the St. Louis Federal Reserve.
Rossman urges people to stick to any newfound, good personal finance habits.
"We have an opportunity," he said. "There's a chance to write a different kind of story here."
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.