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Poll Shows One in Five People Fund Lifestyle with Credit Cards

[Monday, September 29th, 2014]

Credit cards are meant to make life easier, not to add an increased burden. But for many people, using credit cards means getting into debt and living a lifestyle they can’t afford, says the National Foundation for Credit Counseling (NFCC). These people may think life is easier with credit cards, but in the long run, being in debt is compromising their quality of life.

The NFCC’s recent Financial Literacy Opinion Index asked folks whether they could maintain their current lifestyle without using credit cards. Only 27% said they would be able to, while 22% said they would have to make “significant lifestyle changes” if they could not use credit cards. Twenty-two percent said they would be unable to make ends meet at all. The remaining 31% said they would have to implement some lifestyle shifts, but would “basically be fine.”

On a positive note, when people were asked this same question two years ago, only 23% said they could maintain their preferred lifestyle without credit cards. That makes a 4% increase in people who are confident they are not leaning on their credit cards to fund a way of living they cannot truly afford.

The NFCC conducted these studies on the main page of their website, and a random sample of 1,878 people answered the 2014 survey.

Warning signs that you may be in over your head

In addition to the poll results, the NFCC offered a list of ten red flags that might indicate your credit card spending is getting out of hand, and that you might be relying too much on credit. They are:

  1. You pay only the minimum due on your credit card bills
  2. Your balances keep increasing
  3. You’ve missed a payment or paid less than the minimum amount due
  4. You have accounts in collections
  5. You rely on balance transfers to juggle your debt
  6. You’ve gotten a cash advance from your credit card, a payday loan, or another type of non-traditional, high-interest loan
  7. You argue about money with your loved ones
  8. You’ve charged something you would normally pay cash for
  9. You’ve applied for more credit because your existing cards are maxed out
  10. You are considering bankruptcy or debt settlement

Gayle Cunningham of the NFCC urged consumers to seek help if they find themselves funding their lifestyle through credit cards. “People may feel as though they have no alternative to using credit to supplement their income, but that is a dangerous habit that can lead to financial ruin,” she said. “No one ever intentionally digs a deep financial hole, but breaking one of the basic rules of personal finance—spending more than you make—is not likely to have a positive outcome.”

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