Credit Card Debts: Causes and Prevention

Credit card debt is an example of unsecured consumer debt. It results when a client of a credit card company purchase an item or service through the card system. The debt will accumulates and increase via interest and certain penalties will be imposed when the consumers do not pay the company for the money he/she has spent.

We can found that there are certain factors will due to credit card debt . There are as following :

1) For the average individual struggling with credit card debt, the problem begins because they have not created a realistic budget . They often expense over the figure that they can afford.
2) Bank and other credit card issuers will justify big market budgets to get the client money since the credit card interest rate are high and will result a high profit.
3) It is very easy to get multiple credit cards .And, the issuer will take into account the risk factors when setting interest rate. That’s why the interest rate is high .
4) The people around them all probably have multiple credit cards and flash them from time to time, this will influence their own attitude to credit card debt.
5) Immediate gratification that is ‘have now, pay later’ will lead to a person loss their common sense.
6) Spend in the area that they are not needed. For example, when see other people buy furniture or go on exotic vacation all the time , they may want the same even though do not have immediate cash.

Since overburdened with credit card debt can undoubtedly cause both worry and stress not just for the debtor but their immediate families too, therefore we should prevent it to happened. It cannot be denied that setting up budget is the first step that should be taken. Follow by setting a saving goal such as vacation or car. Reward program which do not compromise our finance is the best motivators. Another method for prevention is teaching our youngest generation all about money before they even qualify for a credit card. This is because the earlier the children learn how to mange finances, the less likely they will be to fall into credit card and debt problems as an adult. Further prevention can be avoid extra expenses, get the right card which is no or lower interest rate, and use the cash not credit if you can.

As a conclusion, avoid credit card debt will be a cash convert for the rest of your affluent life.