Credit Card Debts:Causes & Prevention

Nowadays, it seems like credit card has become a necessity for the people in the world. What is a credit card? A credit card is exactly what the name implies. It is a card that enable you to use on credit. Each time swapping the credit card represent you are borrowing money from the credit card issuer and debts are increasing. Credit cards are convenience while using. However, once it is being abused, it can be a nightmare as well as cause unbelievable stress.

Causes of credit card debts:

Poor money management - Money management include saving for emergency. Without saving or save too little, one will reach to credit card during emergency. Besides that, one should also have a monthly planning where it will give you an idea where the money would be spent. Without planning, you might be spending unnecessarily and increase the debts.

Excessive spending(Maintaining expenditure on a reduced income) - Spending excessively is one of the most common things that people is facing. People always cannot control and manage their expenses according to the deduction on salary. They often let the debts to fill their needs. It will make themselves to double or even triple the monthly chargers on the credit cards.

Medical expenses - In this modern society, there are many unpredictable medical problem which occur suddenly without any sign or warning. Due to the enforceability, people often being trapped to the medical debts through credit card.

Too depending on credit card - Since the credit card is easy to be used, one tends to be depend on it. They will prefer to make payment by credit card rather than cash or write a check. Once people is getting into this habit, they will be easily cause a lot of debts.

Prevention of credit card debts

Manage the finances - One needs to set up a budget planning in order to plan for the monthly transactions. They are required to determine their income and needed expenses. They are able to cut out unnecessarily expenses. Besides that, people need to have a saving plan too. With the saving plan one can avoid from credit card debts. They are also able to purchase what they desired without getting into debts.

Choose the right card - People is encouraged to choose the right credit card that provide the best services as well as benefits. People should get their credit card with no or low interest and fees. This will enable them to pay lesser when come to payments.

Pay on time - Paying the debts on time is the best solution to avoid from debts. Moreover, one should often remember to make payment before the due date to avoid from any interest being charged unnecessary. One should also make sure that they make full payment and not only the minimum payment.

Right perception on credit card - One should always view the credit card as the same with cash. Having this perception will create more awareness on spending too much through credit card.

Prevention is definitely better than cure. Being caught in the debts problems is usually a tough process to go through. Hence, there are some useful tips in order to prevent credit card debts.




Sources from:

• http://www.bankrate.com/brm/news/debt/debtguide2004/top-10-causes2.asp
  
• http://www.3debtconsolidation.com/creditcardmistakes.html
  
• http://www.cardratings.com/howtoavoidcreditcarddebt.html
  
• http://www.buzzle.com/articles/tips-on-debt-prevention-and-management.html
• http://www.stop-credit-card-debt.com/2008/07/24/tips-on-credit-card-debt-prevention/