What's Your Credit Quotient?

recent Credit Union Magazine News Now headline declared that "Consumer credit surged in August." The article went on to report that, according to the Federal Reserve Board, consumer credit (not mortgage and home equity loans) jumped $10.8 billion—a 9.6% annual rate of increase—in August. It was the largest dollar increase in seven months, and followed an $8.9 billion gain at a 7.9% annual rate in July.

"The August surge in consumer credit was much larger than analysts expected," News Now continued. Similar reports seem to have become common. But numbers in the billions are so unrelated to our daily spending that they lose meaning. A similar thing can happen in the family budget—at some point, even excess credit may seem normal and necessary.

Credit makes a lot of the things we need and enjoy possible. Handled well, credit is normal and necessary. If you're not sure about your credit habits, take this test to gain some perspective.

In the past three months, I've paid my bills on time:
most of the time	sometimes	usually about a month late	more than a month late
1	2	5	7

Each month, I pay about this much of my take-home pay in credit card payments:
less than 10%	10%-25%	25%-50%	more than 50%
1	2	5	7

I use a cash advance from one credit card to make payments on another card:
never	rarely	sometimes	always
1	2	3	10

I usually pay about this much of each monthly credit card bill:
entire balance	half the balance	a fourth to a third of the balance	the minimum
1	2	3	4

I buy groceries with a credit card because I'm short of cash:
never	rarely	sometimes	frequently
1	2	4	6

I know about how much money I owe:
always	usually	sometimes	rarely
1	2	4	6

I have enough cash in savings to weather most emergencies:
yes	not yet, but close	I'm working on it	no
1	2	4	6

Your credit quotient

Your credit quotient
If you scored 15 points or fewer, you're doing a fine job managing your credit. Congratulations.

If you scored 16-31 points, some of your habits may have you heading for trouble. Call a credit moratorium until you have a better grip on timely payments and unnecessary expenses.

If you scored 31 or more, you already know that credit is causing stress in your life. You can turn that around by consulting professionals at your credit union or by contacting a nonprofit credit counseling agency and investigating your options.