What About Living On Credit?

Asking a financial planner this question will get you a standard answer -- it's never a good time to be living on credit. "Borrowing is nothing but spending a future unearned and uncertain income today and that is always dangerous," emphasises Gaurav Mashruwala, financial planner. 

However, to add to that, the key word in that quote is uncertain. There's no doubt about the fact that we live in uncertain times. 

While one can argue the merits of living on credit for larger assets like houses which create long term value, the logic in exhaustive spending on a credit card, for instance, in times like these is flawed. Most banks have already increased interest rates on credit cards and are currently seriously worried about rising non performing assets arising out of non payment of cards. 

Rising costs of living, EMIs and the uncertainty in the job market make it prudent that you apportion funds accordingly. Spending and that too on a credit card, especially if you can't pay it within the credit cycle is definitely a bad idea.