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More than One in Five Americans Consider Credit Essential

Washington, DC - According to the September poll hosted on the National Foundation for Credit Counseling (NFCC) website, 22 percent of more than 1,900 respondents indicated they could not make ends meet without access to credit.

"There are hundreds of millions of credit cards in circulation, making the plastic temptation very real," said Gail Cunningham, spokesperson for the NFCC. "Nonetheless, credit was intended to be a convenience, not a piggy bank to supplement income."

An additional 24 percent of poll respondents said they would have to make significant lifestyle changes if they did not have access to credit. Taken together, 46 percent of Americans would experience major interruptions to their financial lives if denied the use of credit.

The inability to responsibly manage credit is one of the first financial danger signals. Consider the following data from the NFCC's 2012 Financial Literacy Survey:

  • Thirty-three percent of consumers do not pay all of their bills on time, the highest percentage since the question was first posed in 2008, up five percent over 2011;
  • Thirty-nine percent of respondents indicated they carry debt over from month-to-month, a sure sign that a person is living beyond what his or her income can support; and
  • Sixteen percent have experienced an overdraft related to a checking account.

No one ever intends to dig a deep financial hole. Life's unexpected events often throw a curve to even the most stable financial plans, making credit the choice of last resort to meet monthly obligations. Many well-meaning people think living off of credit will be a short-term solution; the new job is just around the corner; the medical event won't be serious; the divorce decree will read differently. Others have not experienced a financially back-breaking life event, but have built a lifestyle that their income simply will not support.

The solution for either group is a three-step process: stop charging, increase income, decrease expenses. Facing the financial facts can be hard. Changing ingrained habits is never easy, but it is not only worth the effort, it is essential to a person's current and future financial stability.

"Although the 22 percent of people indicating they could not make ends meet without credit is a minority among those polled, it is a significant minority," continued Cunningham. "People are masters at deceiving themselves and justifying spending. Don't be one of them."

To determine if your finances are on the brink of disaster, try living without credit for one month. If successful, it is likely that credit is being managed responsibly. If not, reach out to an NFCC Member Agency for assistance. Spending an hour with a certified credit counselor is time well-spent, and will provide you with concrete answers to your financial concerns.

To locate the NFCC Member Agency closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Spanish, call (800) 682-9832.

The actual September poll question and responses are as follows:

Q: If asked to live on a cash basis, I

  1. Would be able to maintain my same lifestyle = 23%
  2. Would make some changes, but basically be fine = 32%
  3. Would have to make significant lifestyle changes = 24%
  4. Could not make ends meet without credit = 22%

Note: The NFCC's September Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from September 1 - 30, 2012 and was answered by 1.913 individuals.

The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help more than three million consumers through close to 750 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit www.nfcc.org. Visit us on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09 and our blog: http://financialeducation.nfcc.org/.

The NFCC Vision is to create a national culture of financial responsibility.
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