Is Your Credit Card a Cushion or a Crutch?
In general, debt is something we all want to avoid. It’s expensive, burdensome and sometimes it’s even downright dangerous. One of the biggest culprits leading to crippling debt is heavy credit card use. But before you cut up your cards, remember that there’s nothing wrong with using credit as a cushion—just don’t use it as a crutch.
The Credit Card as a Cushion
When you have an emergency expense that you need to pay for, but need some time to free up the cash or get another paycheck, you can pay for that emergency with your credit card and expect minimal (if any) interest charges. This is an understandable and helpful use for a credit card.
Another strategic way to use credit cards is to take advantage of interest-free periods to buy larger ticket items that you can’t quite afford now but will be able to easily pay off before the interest-free period ends.
The Credit Card as a Crutch
When you use your credit cards week after week in order to make ends meet, your credit cards are a crutch rather than a cushion. They aren’t helping you get over one or two short-term financial hurdles in a year, they are helping you maintain a standard of living that you simply can’t afford on your paycheck alone. Even if you manage to use the cards repeatedly without having interest charged to you each month, you’re playing a game of chicken against debt. It’s only a matter of time before you reach a week when you can’t make a payment or have an unexpected emergency and start accruing interest. That’s all it would take for you to be completely over your head financially.
There are steps you can take to get out of the habit of relying on your credit cards as a crutch. But the first and most important is to make a budget based on your income and force yourself to live within your means. It may mean changing your spending habits, but it will also mean helping to prevent debt and bettering your future.
#CreditCards #CreditTips #CushionNOTCrutch