Would It Be Wise To Spend That Stimulus Check To Pay Off A Credit Card Debt?
A considerable amount of people will soon receive their stimulus check in the coming three weeks. This news hit the headlines after the United States government, particularly the Senate and the House, granted a $2 trillion stimulus package to counter the damage done to the economy by the pandemic.
Many tax-paying American citizens will get a one-time check of $1200, which is dependent on their reported income. By the way, if you get that check, spend it wisely. You might think about paying off your credit card debt with the money you receive, but the question is, should you?
Is everyone entitled to a stimulus check?
The amount of the check that will be distributed is dependent upon the returns you filed for 2019. If you didn’t file the that year’s returns, the data that will be taken into account would be of 2018. People will more likely get $1200, but couples will get $2400.
As for parents, they are set to receive $500 for every child that they have. Not everyone is entitled to get a check, though, as it is dependent upon the gross income that is mentioned on the most recent tax returns.
If you make $75,000 as a single person, $112,500 as head of the family, or $150,000 if married and jointly filing the return, there’s a chance that the amount you’ll receive will be deducted by $5 for every $100 in your income.
And once your salary enters the following limits, you can’t look forward to receiving a check at all: $99,000 for individuals, $146,500 for head of households with one kid, and $198,000 for joint filers without kids.
Can I spend the check to clear the slates of my account?
Americans, on average, have a balance of $6,194 on their credit cards, which makes it considerable to spend the money on paying off debts. However, it is not the wisest thing to do when it comes to this situation.
Due to the current conditions and while there is an outbreak, your working hours might be reduced, and you might not be bringing enough money as you used to. Your spouse or husband may also be facing severe financial issues, with constant worries about both of your jobs being at risk.
These conditions mentioned above already harm your finances while you’re trying to survive this economy, so the best thing you can do is to save the check for future expenses. After all, one can never know what the future might bring. However, if you have a sizeable amount of money saved somewhere, then that’s the time that you can at least use some of the money from the stimulus check to pay off your loan.
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