Credit Card Debts: Causes and Preventions

Credit card is the most widely used “currency” in the world and they are accepted almost everywhere nowadays. This small plastic card works superbly in e-commerce as a secured payment medium and it is convenient as well as easy to use. However, they can lead to a tragic and stressful ending if you misuse them.

One of the reasons families accumulating lots of credit card debt is poor money management. This is because they do not have a proper monthly spending budget or spending without ever knowing is it really necessary. By the end of the day, they probably find themselves trapped as they need to pay the snowballing interest debt. As credit can be so easily obtainable nowadays, people often place their reliance on the credit card and starts to spend more than they could earned. For instance, if one saw things that he wanted so much but cannot afford with his income, he may rely on the credit card. If this happens repeatedly and when the time comes to paying the debt back, it is your debt and your responsibility.

Another reason for credit card debts is unexpected unemployment. It can happen when the main breadwinner for the house loses job unexpectedly but yet, monthly household expenses are still needed to be incurred. As a result of zero income, families are forced to use credit card for groceries, utilities and others.

E-commerce can contribute to credit card debts as most of the web merchant will recommend to pay via credit card since it would be a more secured payment. For example, although there will rebates if you buy online for Dell computer, but a computer might cost you over thousands on a credit card debt immediately. Huge medical expenses can also contribute to credit card debt as most of the time we are required to pay first for the medical treatment. If one neither has cash in hand nor enough savings in the bank, hence credit card would be the solution to pay for such expenses.

However, there are ways to prevent our lives being surrounded by debts. Wisely use the plastic card for cash advance feature or as a payment medium in case of emergencies but not to take advantage of the credit feature. It is also encouraged to stop using credit card to make every payment as the first step to clear ourselves out of debt.

Besides that, credit card debts can be minimized if we make payments of the credit card bill on time every month If possible, we are also encouraged to pay more than the minimum required so we are not bound to pay more for the interest. Moreover, debts wouldn’t have gone skyrocketing if we control ourselves from the seduction of credit card. As a way to get ride of it, make planning for our money and save more. This can make our life easier and stress free from debts.