The slowing economy took a turn for the better this past shopping season, as retailers reported an increase in sales compared to the same time periods of the past few years. Considering that many stores depend on the holiday gift giving season for up to 40% - 50% of their annual sales, this was welcome news.

Sadly, a majority of people were still using credit cards for a majority of purchases, increasing account balances that were already too high. For the ever-increasing online purchases, paying with cash is never an option. Now, the time has come when the reality of those higher balances appear as the credit card monthly statements arrive.

The upswing in sales is a direct result of rising consumer confidence. People believe their personal economy is going to improve. When that improvement happens, the bills will get paid. However, when someone’s personal economic condition does not improve, the cycle of debt begins.

Unless a person can payoff their card balances within a few months, then the amount of spent on those 2010 gifts will grow as interest on those purchases continues to accumulate. That $1000 spent on holiday gifts could balloon from $1200 to $1500 once those purchases, plus interest, are paid for.

The unfortunate truth is that most people never know how much money they are actually spending. Current purchases are simply added to previous balances, interest, future purchases, and future interest. When a consumer does not know the actual cost of purchased items, it becomes nearly impossible to know how those purchases fit into the gift giving budget.

How do consumers survive in 2011 when the debt begins to grow out of control? First, put away the credit cards. Use cash or debit cards. This helps you spend less than your income. If a family’s monthly income is not enough to cover the monthly expenses, then that family cannot survive. Period. Difficult choices must be made on which expenses must be cut out their lives.

Secondly, eliminate the debt burden left behind. Many people continue to discover that debt elimination programs are very real. These elimination programs take advantage of consumer protection laws which have existed for many years. To accomplish this, it is again imperative that the commitment is made to live without credit cards. Just stop to imagine the saving if you were not losing money on interest payments. That’s greater spending power for you.

When using cash or debit cards for your purchases, you are less likely to make that un-needed purchase when you can actually see the money disappearing from their wallet, or when there is not enough money in the wallet to begin with.

Using cash for a majority of purchases makes it easier to eliminate foolish purchases, and save money. When using cash, your conscious is clear because the decision not to buy an item is made for them, so the guilt about buying, or not buying, an item is relieved. No money in the wallet? Oh well, no new pair of shoes for me today. Walk away without the guilt of a larger debt load.