Using credit to pay monthly bills

 Relying on credit cards to pay your monthly bills is a form credit card abuse (or misuse) and a good indicator of future financial trouble. Using credit to pay your anticipated monthly expenses is particularly dangerous if you are close to the card’s limit and making only minimum payments.  If this is the case, you will very quickly come a point where you have used up all your credit: a serious situation, since you will now be on the hook for higher monthly debt payments as well as your regular expenses.  Unpaid amounts on high interest cards can grow exponentially and overwhelm your resources. If you are here right now, you need to address the problem as quickly as you can, with either increased income or reduced spending. 

Reducing your spending:  This involves prioritizing your expenses and cutting out all non- essentials.  Which expenses are essential to survival?  Rent (or mortgage), utilities, medical costs, basic food and basic transportation costs (think: park the car.) Believe it or not, you can survive without spending on entertainment, restaurant meals and clothing while you are clearing up your debt.

Paying down a credit card may be challenging, and if you must choose between putting food on your table and paying your credit balance, by all means buy food: but cut back on non-essential spending. You do not need to pay for television, gym memberships or eating out. Your grocery list should include healthy basics, not prepackaged or extravagant items. You can also cut out alcohol and cigarettes if these habits are part of your spending. Letting go of things you want but don’t need will keep a roof over your head and food in your belly. It will free you from ongoing credit interest obligations and allow you to keep more of your earnings in the future. 

This debt reduction strategy may seem like nasty medicine but it is far better than the alternative, which is bankruptcy. The lights at the end of the tunnel will get brighter and stronger as you take control of your financial situation.  

While you are in debt-reduction mode (consider no TV, computer or cell) you may find you have time to make some extra money and /or work on important relationships. Remember freedom comes when financial stress goes away.