Whether you lost your job, experienced unexpected costs, or just live beyond your means, all too many Americans are finding themselves using credit to supplement their income rather than a last resort.
A National Foundation for Credit Counseling (NFCC) September poll of nearly 2,000 American adults showed that 22% of respondents said they use credit cards to make ends meet, and 46% would have to significantly alter their finances without a credit card. Only 23% said they would be able to maintain their lifestyle without using credit.
“Credit was intended to be a convenience, not a piggy bank to supplement income,” Gail Cunningham, spokesperson for the NFCC, said in a press release. “Although the 22% of people indicating they could not make ends meet without credit is a minority among those polled, it is a significant minority,” Cunningham said. “People are masters at deceiving themselves and justifying spending.”
The NFCC 2012 Financial Literacy Survey revealed a number of financial red flags among respondents:
- 33% of respondents do not pay their bills on time, up 5% from the 2011 survey.
- 39% live beyond their income by carrying debt from month-to-month
- 16% have been overdrawn in their checking accounts
To remedy these poor financial habits, the NFCC challenges consumers to at least try living without credit for one month and to seek a reputable credit counselor. The Department of Justice has a list of approved credit counseling agencies by state.