Reliance on credit cards remains high in the U.S.

In the years following the recession, many Americans have attempted to rein in spending and get their credit card debt under control. However, difficult financial circumstances have made it difficult for these consumers to do so. Millions of individuals are still unemployed, and households across the country are struggling to meet rising food and gas costs, medical bills, mortgage payments and other financial obligations. As a result, some have been forced to rely on credit cards more than they would like to make ends meet.

The results of a new study conducted by the think tank Demos reveals 40 percent of low- and middle-income households rely on credit cards to meet their basic day-to-day needs because they did not have the funds available in their checking accounts to cover these expenses. This includes using credit to cover grocery costs, mortgage payments, insurance premiums and utilities.

Being forced to rely on credit cards can indicate financial instability for households, and there are several options consumers should consider to wean themselves off credit card use. The first step is to find out why they are relying so heavily on credit cards. Exploring these reasons can help individuals develop a plan to break their dependence on credit cards. In some cases, it may be a matter of simply overextending their finances due to poor budgeting or a lifestyle they can't afford. In other instances, families may be forced to rely on credit cards due to circumstances beyond their control, such as a job loss, heavy debt or disability.

Second, a budget is crucial for individuals of all financial positions and income levels. Enrolling in credit counseling can be a cost-effective resource for struggling households who need assistance formulating a money management plan. Regardless of whether credit card dependency is a result of overspending or limited income, downsizing on certain items may help consumers rein in their spending and take better control of their money. This may include cutting luxuries, such as cable and cell phone packages or making larger changes, including downsizing to a smaller vehicle or home.

In cases where a homeowner is forced to rely on credit to make mortgage payments, credit counseling agencies may also suggest housing counseling to consumers to help them find ways to reduce their burden.