Should you turn to credit cards if you can’t pay the bills?

Credit cards can cover bills, but you’ll need to decide if using them to pay for expenses is a good idea.

Key points

• Sometimes it is difficult to cover bills for living expenses.
• If you have available credit on your credit cards, it may be tempting to use them to pay ongoing charges.
• You’ll want to explore other options and consider the downsides before using your cards to pay bills.

If you’re struggling to cover your living expenses, it may be tempting to charge your purchases to your credit cards if you have credit available. But while charging things to your cards might fix affordability in the short term, it might make it harder to stick to your budget in the long run.

So, is it always a good idea to turn to your cards in times of financial difficulty? Here’s what you need to know.

Why you should try to avoid turning to credit cards to pay bills

In general, it’s a good idea to avoid charging a credit card anything that you can’t pay off in full before you start incurring interest charges. Credit cards can be a very expensive way to borrow, with some cards charging interest of up to 17%. This means that you will make everything you load onto your card much more expensive.

When you charge daily expenses to a credit card, you also incur future income to cover today’s expenses. So in the future, it will be even more difficult to live within your means because you will have less money available because part of it will be used to pay for past purchases.

What are your other options?

While you wouldn’t charge daily expenses to a credit card in an ideal world, sometimes people find themselves in less than ideal situations. If you don’t have the money to pay for the things you need, you need to find a solution.

Before turning to cards, however, you should consider other options. If you can sell items you no longer need or take on extra work to cover your costs, that’s a better option. Likewise, researching discounts you can take to avoid borrowing would also be a better option than charging expenses to credit cards. You can also check out government programs that might help cover costs, such as Medicaid for medical care you can’t afford.

But if none of these options are available, credit cards might be a better solution than even more expensive payday loans. You might also be better off charging things to credit cards rather than skipping house or car payments and dealing with foreclosure or repossession — especially if you’re dealing with a debt crisis. short term cash.

In other words, if you don’t have a better solution, using credit cards to help pay for critical expenses may be your best option as long as you recognize that it’s not a long-term solution. term and you will need more money later.

When should you use your cards as a fallback?

If you must use credit cards to bill daily expenses during tough times, you should aim to find a 0% APR credit card when possible. A 0% APR card charges no interest on purchases for a limited time so you can avoid owing more money to a card issuer.

You should also develop a plan to pay off what you owe as soon as possible and ensure that you don’t find yourself in a similar situation in the future.