Credit is a powerful tool. It can be your best friend or your worst enemy. Credit card debt can creep up on you. If you're engaging in the following credit card practices, you could be heading for trouble.

1. Paying for essentials like food and gas with your credit cards.
2. Paying monthly bills like gas, electric, and cable with credit cards.
3. Carrying balances from month to month.
4. Using cash advances or "convenience checks" to get cash to make it through the month--to pay the mortgage or car payments.

Credit cards a fact of modern life. It's really hard to live with them, but not impossible. The problem is, if you carry a balance every month, you're at the mercy of the credit card companies. They can raise your rates or your payments at any time. Use these tips to break free from your credit card debt.

Prepare for Emergencies

Being "upside down" on your auto loan means that you actually owe more on the car than it's worth. It's not uncommon to be in this situation, and if you plan on holding onto the car until it's paid off, it's really not a problem. But if you've run into tough times and need to sell the car to get rid of debt, you could be in a situation of selling the car and still owing money on it.

If you're faced with student loans, you're not alone. It's becoming increasingly difficult to fund even a state college education without some sort of financial aid. How much do you really know about financial aid? Read on for some student loan and college financial aid facts.

• The two types of federal student loans are the William D. Ford Federal Direct Student Loan Program and the Federal Family Education Loan Program.

Think being in debt is just fine? Read on for the top ten reasons why it's great to be debt free.

1. You won't be still paying for Christmas gifts in July
2. You won't have to "sweat it out" at a restaurant or check-out counter wondering if your card is going to be rejected.
3. When you get your paycheck, the money is yours--not the credit card company's.
4. You won't visit the mailbox with trepidation, dreading the credit card bills sitting inside.

The last thing you can imagine doing when you're drowning in debt is saving money. "Saving money? Where am I supposed to find money to save when I don't even have enough to pay my bills?" But consider this: When you're trying to get out of debt, the number one thing you can do to help your situation is to not take on any other debt. That means don't use your charge cards. Period. But what about the inevitable emergency? The car repair, the medical bill, the unexpected plane trip to see a sick relative--these things will happen, you can bet your last dollar.

Your FICO score tells creditors and potential creditors how creditworthy you are. It's called FICO because the company that devised this method of credit scoring calculation was previously named Fair Isaac Corporation.

When you fall behind on your car payments, you run the risk of having your car repossessed. This means that if you're in arrears by even one month, you could wake up one morning to find that the bank has taken possession of your car.

The best way to stay out of trouble with the IRS is to file your taxes every year and pay what you owe. Sounds easy enough, but for many reasons, some people find themselves owing more money to the IRS than they can pay at one time. If you're in this situation, the following tips may help.

You've probably had the thought at one time or another: If I could just win the lottery, I'd be okay. If I were a millionaire, I wouldn't be having these financial difficulties.