RICHMOND, Va. (WRIC) — Most financial planners would caution against living on credit cards[1], especially when carrying high amounts of debt and purchasing items that are not necessities. However, a recent study done by the National Bureau of Economic Research shows that there may be one time when it's acceptable, and even encouraged: when looking for a new job. The study focused on individuals who had recently lost their jobs and were looking for new employment. When these individuals had little to no savings and little to no income, they were often forced to live off of credit cards[2].
Those individuals with higher credit limits[3] actually had an advantage over those with less available credit. They were able to take their time in finding new employment. Those who asked for an increase in their credit limit equal to at least 10% of the salary from their previous job were able to spend as long as three extra weeks searching for a job[4].
Those extra weeks often had a major impact on the quality of job the individual took. Those who did not have a large amount of credit and were strapped for cash often took low-paying jobs[5] or jobs they did not want in order to pay their bills. Those who could take longer were able to find jobs that were a better fit for them or that paid better, allowing them to start a new career rather than simply make ends meet.
If you want more credit, check out MoneyTips' list of credit card offers[6].
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References
- ^ credit cards (www.moneytips.com)
- ^ credit cards (www.moneytips.com)
- ^ higher credit limits (www.moneytips.com)
- ^ searching for a job (www.moneytips.com)
- ^ low-paying jobs (www.moneytips.com)
- ^ credit card offers (creditcards.moneytips.com)
- ^ Twitter (twitter.com)
- ^ Facebook (www.facebook.com)
- ^ Instagram (www.instagram.com)
- ^ iReport8@wric.com (wric.com)
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