Jun 30, 2008 7:40 pm US/Eastern
Credit Crunch: Consumers Charging For The Basics
Reporting
Cindy Hsu
NEW YORK (CBS) ―
With the economy struggling and prices on just about everything going up, many Americans have been relying on credit cards for even the small things. But as CBS 2's Cindy Hsu reports, it's a risky proposition.
There was a time when people whipped out their credit cards for the big things, like a new T.V., but now more and more Americans are charging even the basics, like everyday groceries.
"Now I use my credit card for everything, to have a chance to pay little by little," said Ziyad Kased of Staten Island.
Kased is certainly not alone.
"The money is not stretching from payday to payday, so you have to take care of your family," said Sakena Greene of Park Slope.
According to Money Management International, 1 in 5 people have turned to credit for basic necessities. Debt counselors are noticing this trend more and more.
"You're finding a lot more people rather than using their credit cards for vacations or rental cars, something that would be more of a luxurious type, now you're seeing it for a more necessity based groceries, to put clothes on their children's backs," said Colin Nupp of Debt Counseling Corporation.
CBS 2 found a lot of folks who barely carry cash anymore.
"I used to use cash all the time, now it's mostly credit," said Matthew Childs of Crown Heights.
Childs is lucky. He is able to pay off his debt at the end of each month. But most people aren't so lucky. Experts say if you have to do it, use a credit card that offers rewards programs to save on groceries, giving you cash back percentages when you shop at certain stores.
Pay attention to your receipt. According to debt management experts, a lot of stores overcharge because of scanner mistakes and transfer all credit card balances to a 0 percent interest rate card to help consolidate and pay down the principle.
Experts suggest using credit cards that offers rewards programs, to pay attention to your receipts and to transfer all balances to 0 percent interest rate cards.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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