With the cost of groceries, gas, utilities, and other necessities putting pressure on household budgets, using a credit card to cover everyday expenses can sometimes feel like the only option.

The problem is that when you can’t pay the balance in full, those everyday purchases can end up costing considerably more.

When Everyday Purchases Become Debt

A credit card is borrowed money. When you carry a balance from month to month, interest can be added to what you owe. That means groceries, gas, or household supplies purchased today could still be costing you money months later.

Prosper Canada’s financial literacy curriculum provides a helpful example of how quickly interest can affect debt. Using an example of a $1,000 credit card balance with a 20% annual interest rate, approximately $16.67 in interest is charged in the first month. With a $20 minimum payment in the example, only $3.33 goes toward reducing the original balance.

This illustrates why making only minimum payments can make it difficult to get ahead.

When Credit Becomes Part of the Monthly Budget

Using credit occasionally isn’t necessarily a problem. The warning sign is when credit becomes necessary every month to pay for basic expenses because there isn’t enough income available to cover them.

This is a reality facing many households. Prosper Canada has highlighted Canada’s ongoing affordability challenges and reported that many households are borrowing money to cover daily expenses.

If you find yourself regularly putting groceries, gas or bills on a credit card and carrying the balance forward, it may be time to look at the bigger financial picture.

What Can You Do?

If you’re carrying credit card debt, start with what is manageable for your situation.

Know what you owe. Write down your balances, minimum payments and interest rates. Prosper Canada’s Financial Empowerment Toolkit recommends knowing both what you owe and the interest rates attached to those debts.

Pay more than the minimum when you can. Even a little extra can help reduce the balance and the amount of interest you pay over time.

Look at your budget. Understanding where your money is going can help you identify whether there are expenses that can be adjusted. For households already struggling to cover necessities, however, there may simply not be much left to cut.

Prioritize higher-interest debt. Prosper Canada’s debt repayment resources suggest focusing additional repayment efforts on the debt with the highest interest rate while continuing to make the minimum payments on other debts.

Ask for help before things become overwhelming. Prosper Canada’s Dealing with Debt toolkit includes worksheets to help people identify financial priorities, calculate what they owe and develop a repayment strategy. Prosper Canada also recommends working with a trusted financial coach or credit counsellor when possible.

There Is No Shame in Asking for Support

At the United Way of Bruce Grey, we understand that financial challenges aren’t always solved by simply spending less. When the cost of necessities rises faster than a household’s available income, difficult choices can become part of everyday life.

If you’re struggling to make ends meet, reaching out for information and support can be an important first step. 211 can help connect people in Bruce and Grey counties with available community services and supports.

Financial knowledge won’t make the cost of living disappear, but understanding how credit works can help you make more informed decisions and recognize when it’s time to seek additional support.

Learn More

Prosper Canada offers free financial literacy information, tools, and resources through its Learning Hub, including resources on managing debt, budgeting, credit, and building financial confidence.