Could you live without credit?

A startling new poll conducted by the National Foundation for Credit Counseling (NFCC), shows that consumers are relying on credit for more than just big purchase. In fact, 22 percent of 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, and up five percent from last year
• 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
• Sixteen percent of consumers have overdrafted their 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. 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 a month. If you can do it successfully, that's a positive sign that you are able to manage your finances responsibly. If not, reach out to an NFCC Member Agency, such as Money Management International (MMI) for assistance.

Spending an hour with a certified credit counselor is not only time well-spent, but it will provide you with concrete answers to your financial concerns.

Note: The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. Money Management International is a member of the NFCC. he NFCC’s September Financial Literacy Opinion Index was conducted via the the NFCC's website from Sept. 1 to 30, and was answered by 1,913 individuals.