Credit Cards in a Bad Economy

The economy is horrible right now and doesn’t appear to be getting any better any time soon. Many people are unemployed or underemployed and having a hard time getting by. So the question is, “Should I use my credit cards to get by while I continue to look for a new job?” This is very risky business and there are many reasons not to use credit cards at a time like this.

The biggest issue is that nobody really knows when things are going to get back to normal with our economy. So if you start spending on credit cards to maintain you current lifestyle while you wait for that big job to come, you are gambling that you’ll find work before you either max out your credit card or can’t afford the monthly payment. This might work out, but what if it takes too long to find work. It’s like gambling you future. You’d be better off to make cuts in your current lifestyle and find a way to reduce your credit card balances.

I see ads all the time for credit cards, “Cheapest Unsecured Loans Online”, or “Loans for the Unemployed”. But think about what you are going to do to your credit report. You rack up all this debt while you are looking for work and then all of the sudden you can’t make your payment and you are maxed out. And it’s not like you are only going to miss one payment. It’s common for people right now to be unemployed for months to years. All those months that you aren’t making your payments are going to do huge damage to your credit score.

Let’s hope that you are indeed able to find a great job before you can’t make your payment or run out of available credit. But now you have your new job and still have this huge hill to climb to get out of debt just when you are starting to get back on your feet.

So while it maybe temping to reach for your credit card so you can keep your current standard of living while you are looking for work, this is something you should avoid. There is just too much risk and not enough benefit. Find a way to live cheaper and get by until you can land that new job.

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