by Christine L. Rice

Created on: February 03, 2009   Last Updated: April 29, 2011

Credit cards are a bad habit and troublesome for many people. Some individuals find themselves in debts that they can't readily, or always, get out of. There are numerous companies that offer services to help people out of debt. There is also bankruptcy-hopefully used as a last resort-which is a suitable solution for some people. Most people that file for bankruptcy have substantial credit card debt. So why are credit cards so difficult to manage?

Credit cards are essentially a flexible loan with a monthly bill. It is easy for people to forget, either mistakenly or intentionally, what and how much they charge throughout the month. Purchases add up quickly when they are not paid for from a bank account or with cash. Pretty soon credit card users have over-spent their monthly budget. When the bill comes in, they are unable to pay off the entire balance, which carries over to the next bill with additional fees and surcharges. It is difficult to charge nothing at all-or even just charge less-the next month in order to catch up, so the balance often grows larger with each passing month.

It is important to realize exactly how credit cards work for many people in order to avoid making similar mistakes. Naturally, people like to shop for new things, because it is rewarding to treat oneself. But it is important to keep in mind that a budget is generally limited, so if it is exceeded there will immediately be financial trouble. Plus, it is difficult for people to abruptly change their spending habits and that is why the balance will continue to grow.

The wisest decision is to not have many credit cards. Owning just one credit card is enough to maintain credit and be able to pay for things where only a credit card is the only acceptable form of payment, such as with renting a vehicle, booking a plane or hotel reservation, and online purchases. Just remember that the more credit cards a person has, the more difficult it is to keep track of the balances and the easier it is to get into debt.

The best way to handle credit cards is to first figure out a monthly household budget. Make a list of everything your household needs to pay for and try not to leave anything out. Put down the cost of each expense and round up when not sure or if the amount fluctuates. Every dollar counts so be as thorough and accurate as possible. Don't forget to include expenses that are paid less often than monthly by figuring out what the monthly average would be.

Next, add up all your net household

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