If you live to use your credit card - and almost everyone has one of these handy little things in their wallets - then you could be setting yourself up to drown in very nasty credit card debt. Using a credit or debit card has actually made people spoiled, to the point that very few people ever carry cash in their pockets. This is a very dangerous scenario, one that you need to stop and seriously think about. If you are facing credit card debt during this global economic recession, it's time to cut up the credit card and start filling your pockets with good old fashioned cash.

One thing many people do not do when they first apply for a credit card is read the terms and conditions under which they will be charged. All they know is that the card is going to give them an amazing interest rate - which could even be 0% for so many months - and they focus in on that. The great interest rate is great while it lasts and while you make your payments on time every month. As soon as the honeymoon period with the rate is over with, consumers are faced with interest rates that could be as high as 30%, and if they had any charges remaining on the credit card that they didn't pay off during the 0% time frame, they are now stuck paying interest on that balance at the new and considerably higher rate.

Having a credit card is not always bad, especially if you are a conscientious shopper and you do not charge above your means. There are going to be times in your life when you will need to have an established credit record in order to qualify for things, such as a mortgage on a house or a loan on a car. You have to have established credit for these things, so using a credit card wisely and responsibly will help you build up a credit rating without putting you in credit card debt.

One serious problem consumers have is the compounding interest they have to pay on multiple credit cards. This interest can easily build up and leave the consumer under a mountain of debt  they do not know how to get out of. If you do not pay off your credit card balance each month, the interest simply keeps accruing in a vicious cycle that is hard to get out of. Another bad use of credit cards is for intangible items, such as groceries, salon treatments, petrol, and other things that are gone in no time with nothing left to show for the money you just spent by the time the bill comes in. While it may be tempting and convenient to use your credit card this way, there is a better alternative: cash.

If you want to have a credit card handy for emergencies where there is no disposable cash on hand - say on vacation and you vehicle breaks down - then you should make sure that the one you have has the lowest interest rate you can qualify for. If you have other credit cards, pay them off and close the account so you are not tempted to continue using them. Stand strong against the lender that will try and talk you out of keeping the account open. And always pay off your balance each month to keep that debt from piling up on you.