How Reliance on Credit Cards Affects Financial Habits

Credit cards can be a great tool when used with responsibility.  However, when you become reliant upon credit cards to pay your monthly bills, you may find yourself in a financial hole that is difficult, if not impossible, to dig yourself out of.  You may find yourself using one credit card to pay off another, only to be going back and forth after a while, racking up interest charges until you can no longer pay the bills.  Too strong of a reliance on credit cards can actually ruin your finances completely.

*How you become reliant on credit cards

It may start out innocently enough.  You want a nice dinner, or even can’t wait until pay day for a trip to the grocery store, so you use your credit card to pay for your groceries.  You think you are going to pay the bill before they even charge interest, but other bills come up before you get a chance to pay it.  Next thing you know, you are paying minimum payments on your last grocery trip.  You keep thinking you are going to pay it off or at least pay it down soon, but the next thing you know, the interest has racked up to the point that you are never likely to pay it off.  You have to use another credit card to pay for the first, and start down that same spiral as before with the second card, and the third and so on.  By the time you realize how deeply in debt you are, you are so far underwater you can no longer see the surface.

*How to solve the problem

Once you realize that you have become too reliant on credit cards, you need to stop using them.  This can sometimes be difficult because you have been using them as much for needs as for wants, but it is important to stop using them.  Find ways to be more frugal.  Clip more coupons.  Make sacrifices wherever you can.  It may be hard to tighten your belt at first, but if you are going to stop being so reliant on credit cards, it is necessary.  Use cash wherever possible, and pay off one credit card at a time, while making minimum payments on the rest of them, then move on to the next.  If you are too deeply in debt, you may need to file for bankruptcy, but this is only as a last resort.

Unfortunately, it is way too easy to become reliant on credit cards in today’s society.  As a result, many people who have done this are now in financial trouble.  The best thing that you can do if you are in this situation is to get yourself out of it as soon as possible.