The big argument for credit cards is that you should simply use them like cash. In other words, you should only charge as much as you would spend with cash anyway, and then you’ll be able to afford it.
In fact, when done right, this can be beneficial. If your credit card gives you cash back or other rewards, for instance, you can make use of them just by routing all of your purchases through the card. However, there is one major issue with doing this, and it’s a risk of which you must be aware: You could spend more than you intend.
Your spending habits may change with the method of payment
The problem is that people tend to spend more when using credit cards than with cash. You may overspend if you do this, negating the benefits of the rewards.
It’s something of a psychological trick. You do not really feel as if you are spending money when you charge it to a card. This makes it easy to throw one extra item on the bill or to impulse buy something you don’t really need. If you had limited cash and you had to physically hand it over for that purchase, you’d never do it, but the credit card creates this artificial distance since you do not have to pay until the end of the month.
What if it becomes too much?
Of course, you do eventually have to pay off that debt. When it comes due, you may find that you’re over what you can afford. At times like these, bankruptcy can be a useful tool to help you get a fresh start.