The topic of inflation’s impact on credit card debt has become increasingly relevant in IELTS Writing Task 2 examinations, particularly over the past two years. Based on analysis of recent test patterns, questions related to personal finance and economic challenges appear in approximately 15% of actual tests. Let’s examine a common question format and provide model essays across different band scores.
Analysis of Task 2 Question
Some people believe that rising inflation leads to increased credit card debt among young adults. To what extent do you agree or disagree with this statement? Provide reasons for your answer and include relevant examples from your knowledge or experience.
This question requires candidates to express their opinion on the relationship between inflation and credit card debt, specifically focusing on young adults. The task demands both analysis of economic factors and consideration of personal financial behavior.
Band 8 Model Essay
Rising prices in today’s economy have indeed created significant financial pressure on young adults, leading many to rely heavily on credit cards for daily expenses. I strongly agree that inflation contributes substantially to increased credit card debt among this demographic.
The primary reason why inflation drives up credit card usage is the growing disparity between income levels and living costs. When essential items such as food, housing, and utilities become more expensive, young professionals often find their salaries insufficient to cover basic needs. For example, in many Asian cities, rental prices have increased by 20-30% in recent years, while entry-level salaries have remained relatively stagnant. This disparity forces many young adults to use credit cards to bridge the gap between their income and expenses.
Furthermore, the psychological impact of inflation can lead to poor financial decisions. When young people see their purchasing power diminishing, they may engage in “panic buying” or stock up on goods using credit cards, believing prices will continue to rise. This behavior, while understandable, often results in accumulating high-interest debt that becomes increasingly difficult to repay.
However, responsible financial planning can help mitigate these challenges. Managing personal debts during inflation requires discipline and understanding of basic financial principles. Young adults who educate themselves about how to avoid excessive credit card debt are better positioned to weather inflationary periods without falling into severe financial difficulty.
Young professionals learning about personal finance and credit management
Band 6.5 Model Essay
I agree that inflation causes young people to get more credit card debt. This is happening because everything is becoming more expensive but salaries are not increasing enough.
When prices go up, young adults face many problems. They need to pay for food, rent, and transportation, but their salary stays the same. For example, in my country, food prices went up by 10% last year, but most young workers didn’t get any salary increase. Because of this situation, many young people use credit cards to buy necessary things.
Another problem is that young people don’t have much savings. When sudden expenses come, like medical bills or car repairs, they have no choice but to use credit cards. This makes their debt situation worse because credit cards have high interest rates.
Also, many young adults want to maintain their lifestyle even when prices increase. They keep buying things they want using credit cards, thinking they will pay later. But this is dangerous because credit card debt and personal finance problems can affect their future.
The solution is better financial education and careful spending. Young people should learn about how to reduce debt through smart planning and try to live within their means.
Key Vocabulary Terms
- Inflation (n) /ɪnˈfleɪʃən/ – A general increase in prices and fall in the purchasing value of money
- Purchasing power (n) /ˈpɜːtʃəsɪŋ ˈpaʊə/ – The value of a currency expressed in terms of the amount of goods or services it can buy
- Stagnant (adj) /ˈstæɡnənt/ – Showing little or no movement, growth, or development
- Financial literacy (n) /faɪˈnænʃəl ˈlɪtərəsi/ – The ability to understand and effectively use various financial skills
- Accumulate (v) /əˈkjuːmjʊleɪt/ – To gradually get more and more of something over time
Conclusion
The relationship between inflation and credit card debt remains a crucial topic in IELTS Writing Task 2. Practice writing essays on similar topics such as:
- The role of financial education in preventing debt
- Government measures to control inflation
- The impact of economic pressure on young professionals
Share your practice essays in the comments section for feedback and improvement suggestions.
