Living Beyond Your Means

• Living beyond your means can include purchasing a house or car that you can't afford, or spending money uncontrollably trying to maintain a certain image. When present income isn't enough to meet these expenses, you may use credit cards to compensate. Averting this problem includes recognizing your financial limitations and reducing expenditures to create disposable income and help limit spending with credit cards. Trading in a car and lowering your car payment, and even renting or buying a home with a cheaper mortgage can improve financial hardships, and allow you to stop relying on credit cards.
  
  

Unforeseen Problems

• Emergencies such as an expensive car repair or medical bill may prompt you to use a credit card. What's more, after getting fired from a job or laid off, some people use credit cards to make ends meet while they look for new employment. Without income, paying balances can provide difficult and balances can accumulate beyond control.
  
  

High Interest Rates

• A not-so-perfect credit score and poor payment habits can trigger higher interest rates on credit cards. Interest rates determine the minimum payment and how fast you're able to pay down the principal balance. If paying an interest rate in the 20 percent range, and if you're only able to make minimum payments each month, you will reduce your principal by only a small percentage. A better interest rate is key to avoiding this issue. You could ask your card company to reduce your present rate or transfer the balance to a low-rate credit card, if eligible. Improving your payment history with creditors first helps you acquire a lower interest rate.
  
  

Carrying a Balance

• High credit card debt affects your credit score, and if you want to improve your personal rating, start by paying down your balances. Carrying a balance from month-to-month, and then adding additional charges onto the card can escalate debt to the point where you're unable to pay down the balance. Stop using credit and work on paying down your balances with higher payments and lump sum payments. Next, aim to pay off any new credit card charges at the end of each month.