Credit Card Debts : Causes and Prevention

Credit cards aka plastic money, is part of a system of payments that entitles its holder to buy goods and services from a merchant on credit. Credit cards provides convenience to its holders however every so often there are hoders that are burdened by credit card debts. Debts occurs when a client uses the credit card to purchase goods and a large amount of debt would not only cause worry and stress upon the debtor, but also their immediate families. There are several causes of credit card debts:

1. Bad spending habits. This is ultimately the main cause of credit card debts. Many people feel on top of the world by the fact that they are able to buy anything they desire on the spot with a simple swipe of the card and this can more often than not lead to uncontrolled spending. What many fail to see is that they are spending on borrowed money with high interest rates (should they opt for minimum payment) which lead to bad consequences.

2. Ease of getting credit cards. Issuers make it really easy to obtain a credit card or even multiple credit cards (if you have no past debt problems that is..). The ease of getting a credit card may blind them from seeing the darker, more sinister side of it - serious DEBTS. More credit cards = More worries.

3. Peer pressures. People's attitude towards credit card debts can be easily influenced by their peers. Friends or colleagues who talk and brag about their credit cards may cause us to take credit card debts lightly.

4. Culture. The culture that a person is in can also heavily influence their attitudes toward credit card debts. Cultures that have a 'have now, pay later' mind set may take credit card debts less seriously.

There are of course ways to prevent you from drowning in debts:

1. The first is to know that a credit card should only be used as a convenience to pay when you do not have any cash on you and when you do use it, know that you are able to pay the balance before you are charged with interest.

2. Plan all your borrowings. Prepare a statement for your monthly expenses and income. If you have a surplus at the end of the month, only then should you consider using your credit card for the extra purchases you desire.

3. Resist social pressures. Just because your friends/neighbours/colleagues are boasting about the things they bought, does not mean you have to follow suit. Conforming to these pressures may cause a serious strain on your finances.

4. If all else fails, cut up your credit cards so you would not be tempted to use them. You should however, save ONE card for a rainy day.

Related links:

http://www.mozdex.com/prevent-credit-card-debt/

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

http://www.abcarticledirectory.com/Article/Understanding-The-Causes-For-Credit-Card-Debt-Problems/167565