Credit Card Debts : Causes and prevention

Credit card is a common and convenient tool provided by commercial banks to let consumers purchase on credit.


Yet, the situation is getting worse that most of the consumers misuse the credit cards and cause heavy credit card debts until they go into bankruptcy.




Credit card debts problems come from few reasons.

First, the availability of credit card. The rules and regulations to apply credit cards are looser than before. Some banks even charge 0% of interest on the credit card balance in order to get your business done. This is very seductive and people always get trapped although they do not need credit card.

Other than that, advertisement does play a role too.
The society tends to satisfy their desire at the moment, thus, credit cards advertisement would advocate their wish to apply for it.

Besides, people often think that credit card is one of the ways to represent their social status. For instance, other will think that one is very rich if one has platinum credit card. So, a number of people will apply for credit card and try to upgrade it.




Preventions:
Here are some tips to avoid credit card debts:

1. Pay the balance in full. You are advised to pay at least double of the minimum payment every month; otherwise the debts will keep rolling until you cannot afford to pay it.


2. Know your interest rate. Always keep checking the interest rate you are paying for your debts. Not only the interest rate you are offered but also when you get the approval. Sometimes credit card issuers will raise your interest rate with little warning.


3. Pay on time. Bear in mind that credit card issuers might raise your interest rate as a penalty in case you pay late. Always settle the payment before the bill is delivered to you to avoid extra unnecessary fine.


4. Do not depend on credit card. Bring some cash with you and try not to use credit card always. Swipe it only when you have planned it properly.


5. CUT IT ! Cut off your card so that you do not use it. But, whenever it is necessary, keep at least one as emergency backup.





References:

How to avoid credit card debt

Credit card debt prevention