|It is true that I have spent the past ten years telling the OF&B generation (Older, Fabulous & Broke) that running up credit card debt to finance an indulgent lifestyle is flat-out stupid. But that is not advice for the YF&B, who are just trying to make ends meet and live off their credit cards. ...|
I'm changing my hawkish debt stance for you because I understand that you are Generation Broke. By that, I don't mean that you were born broke, but that what many of you had to face in the early years of adult life has made you broke. ...
My credit card strategy is solely for expenses that you need to live on — and not expenses that finance your living the high life. The only YF&Bers who should try this are those of you who are conscientiously doing everything you can to get your living costs as low as possible but are still coming up a few hundred dollars short each month. ...
Because I want this strategy to be nothing but a lifesaver, we need to laydown some basic parameters. While you are starting out in your career, I think it is perfectly reasonable to lean on your card for monthly living expenses, but you are to keep those charges to less than 1 percent of your annual gross income. For example, if you make $30,000, I don't want you to use your card for more than $300 in monthly living expenses. After two years, that would mean you have charged $7,200 on your credit cards. That's the upper limit of what I think is "safe" for you to take on, given your current earnings. My thinking is that within a few years, your career should be picking up some steam, and you can stop adding to your card debt. Ideally, at that point you would be able to start paying down the balance. ...
Ultimately, though, you need to police your own card. It is up to you to gauge whether giving yourself another six months or year to lean on your card will make a big difference in getting your career over the initial dues-paying hump. Just be careful that you don't dig yourself such a large debt hole that you will spend the rest of your life trying to climb out.
Okay, I get the picture:
Entry-Level Job + High Cost-of-Living Area = Credit Cards Are Necessity
True as that might be, I still have misgivings about the advice. Reality tells me that there may indeed be times when Suze's YF&Bers have absolutely no choice but to lean on plastic. But where is the line drawn?
"It's okay. Suze says I can use plastic until I have the perfect job lined up. Once I'm making big bucks, I can pay all this stuff off."
Seems like a pretty tenuous line of advice to balance upon, if you ask me.