I can always spend on credit and pay it off later.
1 min read


Spending on credit assumes you’ll always have the income to pay it off later, but that’s a financial fallacy. In reality, your income might decrease, jobs can be lost, or unexpected expenses like medical emergencies can arise. Over-relying on credit builds a debt burden that can become difficult to manage, leading to mounting interest, fees, and potentially hurtful credit score impacts.

The allure of credit lies in its provision of immediate gratification - the ability to afford what seems unaffordable. Credit cards are often marketed as a bridge over financial gaps, making them particularly appealing to individuals experiencing economic troubles. Furthermore, credit cards also capitalise on the faulty human instinct that perceives distant consequences as less important than immediate rewards.

An effective financial strategy is to spend within your means - that is, to make sure your outgoing expenses, including discretionary spending, do not exceed your net income. Moreover, money should be set aside for potential emergencies, and any credit card debt should ideally be paid off in full every month to avoid accumulating interest charges.

Further reading:

  1. “Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence” by Vicki Robin & Joe Dominguez. Book Link. A book that delves into the principles of living within your means.

  2. “The Total Money Makeover: A Proven Plan for Financial Fitness” by Dave Ramsey. Book Link. A book providing practical tips to get out of the trap of credit and achieve financial freedom.

  3. Article: “The Plastic Safety Net: How Households are Coping in a Fragile Economy” published by Demos. Article Link. It provides an understanding of the impacts and consequences of over-relying on credit.

  4. “Credit card debt”. Wiki Link.