MANY PEOPLE HAVE developed the habit of purchasing commodities using credit cards.  Due to economic meltdown on the global scale, use of credit cards has, to put it lightly, become less effective.  Purchasing items by using only real money has become all but history for most of us.  

No doubt, most individuals have entirely relied on credit.  They use credit cards to buy any form of personal item such as clothes, food, vacations and vehicles.  Continual use of credit cards for purchasing commodities eventually leads to credit debts—which is fine, as long as you can afford to make the payments.  Debts may result, however, when an individual is suspended from work because of economic crisis.  This may, in turn, affect family members due to financial shortages.  Debts can also result from over-spending.  Extravagance is the main reason why most people suffer from huge debts.  Many people prefer to lead luxurious lives that they cannot support with real money.  They buy expensive cars and lavish property without knowing the consequences.  The most common mistake most people make is paying only a small fee to cover the interest of their debts, which is essentially paddling upstream at the exact rate of the flowing water. In short, you’re working but aren’t actually going anywhere.  

Fortunately, individuals suffering from credit card debts can effectively solve the issue.  The obvious first step is for the person to cease from spending money unnecessarily.  At least sacrifice your luxurious lifestyle for a more realistic one to your income.  This way, you will be in a good position to cover all your debts using monthly income.  Going to a debt counseling program is also an effective way in addressing credit card debts.  You will be able to learn how to spend less while, at the same time, covering your debts.  

You can also freeze your accounts.  This is a good but drastic option for individuals who have trouble cutting their spending.  Once the account is closed, it will not be easy to spend money as this means that you will not spend using your credit card.  One of the alternatives to stop using credit cards is to leave them at home or cut them up.  

By going out without carrying your credit card, it is much more likely that you won’t spend more money than you have.  It will force you to only purchase items with the money you have, thus giving the dollar a lot more value.  There are many disadvantages to relying on credit cards.  To avoid this, it is imperative to use cash.  Plan everything you will need for the entire week and buy it using cash.  It is important to keep in mind that once there is insufficient money, you cannot purchase anything else so plan accordingly.

While I used individuals as the example here, an important thing to take away from this is that businesses are represented by the people who run them. Business debt is debatably worse than personal debt because it involves other people and the future of an entire business. When you’re trying to start a business, excessive debt is the last thing you want.