Nearly 223 million Americans have at least one social media account. For people of all ages, social media has become a part of everyday life.
While several studies indicate social media can affect one’s mental health, it seems it can also impact one’s financial health. Many people might think that social media has nothing to do with their finances – especially when it comes to debt. However, recent reports say that is not necessarily the case.
Social media plays a role in increasing credit card debt
The ways we use social media have changed drastically. The first purpose was generally to connect with other people, friends and family. More recently, that purpose has expanded into connecting businesses with consumers.
This expansion has led to several reports that social media has indeed impacted individuals’ credit card debt. How has it done this? According to the most recent reports, it is due to:
- The ease of shopping, with many apps including features dedicated to shopping
- Targeted ads across platforms that cater to an individual’s interests
- Influencers and other users advertising certain products
The COVID-19 pandemic, with many New Mexicans staying home for long periods, only increased the rates of compulsive online shopping as well as the use of credit cards on social media. Additionally, Oxford studies have found a direct correlation between using social media, credit card debt and lower credit scores.
As much as social media creates a type of trap that encourages individuals to spend – and debt to spiral out of control – that is not the only concern on these platforms.
The other risk on social media? Debt collectors
In 2020, the Consumer Financial Protection Bureau passed a new rule that would allow debt collectors and collection agencies to contact individuals over social media. The rule takes effect this year.
Essentially, this could make it easier for debt collectors to contact individuals more often. It is critical for individuals to take steps to protect themselves in these situations and understand their rights.
Social media does not have to cause problems
As the Vox report shows, it does not take long for social media use and credit card use to cause debt to spiral. However, despite the correlations between the two, it is possible for individuals to manage their debt effectively. Debt can feel overwhelming, but it does not mean individuals are hopeless.
For example, filing bankruptcy can put a stop to any type of creditor calls and harassment, whether it is through phone calls or social media. It can also help individuals take control of their finances and financial future from debt. If you are considering filing bankruptcy, it is essential to consult with a knowledgeable bankruptcy attorney who can guide you through the entire process.