Credit Card debts:Causes and Prevention

Credit card debt is an example of unsecured consumer debt. Credit card debt is a problem that can permeate all of your life and that of your family. There are several causes of credit card debts.

First, credit card interest rates are high, therefore the profits can be high. Banks and other credit card issuers are after their slice of that big money, including from you. They can therefore justify big marketing budgets to get your money.

Second, it is very easy to get credit cards, multiple credit cards in fact. Issuers of credit cards make it easy for you, if you have had no debt problems in the past.

Third, your friends, neighbours and work colleagues will probably all have multiple credit cards, talk about them and flash them around from time to time. This will influence your own attitude to credit card debt.

Fourth,you see other people buy new furniture, go on exotic vacations, or go out to expensive restaurants all the time. Even if you never know if they are doing so on credit card, you may want the same. But you do not have the immediate cash, so what do you do? Jump on the credit card train? That is what your society may be pushing you towards.

Fifth, it may be due to poor money management. Without monthly spending plan, you may be spending hundreds of dollars unnecessarily each month and end up having to charge purchases on which you should have spent that money.

As credit card spirals at a society level, it brings with it stress, relationship and other problems. Often, those whose debt is out of control, are afraid to face up to the reality, at least initially, or do not know how to face up to reality.So, how to overcome this problem?Here are a few ideas to help you in preventing the credit card debt problem.

First,set up a budget and stick to it. Be realistic about your expenses and your financial needs, then draw up a detailed monthly plan.

Second, remind yourself every day that you are only going to use your credit card when you have no cash on you, as a convenience, and you will repay it before interest starts to accrue.

Third, never, ever feel you have to buy something just because a neighbour or friend has been boasting about theirs. Envy and jealousy are viruses that minimize your individuality, and can, in this case, damage your finances.

Fourth, limit the number of cards that you have. If your cards offer low interest balance transfers, transfer the balances from your other cards onto the card with the lowest rate.

In conclusion, with the right tools and management, credit card debt doesn't have to follow you forever.

Reference:
http://www.eliminate-credit-card-debt-now.com/EliminateCreditCardDebt.htm