Credit Card debts: Causes and Prevention

Nowadays, credit cards had become major spending tools in our community. There are more people applying for credit cards instead of carrying cash in wallets or purses. We cannot deny that credit cards had brought a lot of conveniences to us, but, on the other hand, it also brought some disadvantages. One of the major issues that rose recently is credit card debts. It is a situation where many card holders owed too many debts by using credit cards and it leads to bankruptcy.

One of the common reasons that cause the credit card debts would be did not manage the finance well. Most of the card holder did not prepare budgets that show them the amount that they had spent by using credit cards. It is because they were not using cash. It is difficult for them to realize whether they were over budget by using credit cards. Another common cause that happens always would be too much credit cards. There are too many promotions nowadays. Many people were attracted by the promotions and started to apply cards one by one. At the end, they will overspend because they need to spend more to get the benefits from the cards’ promotions. Besides that, card holders with many cards will start to pay a card’s debt with another card. Things go round and round and at the end, the cards holder will start to realize that it is a bad idea. They will never finish paying debts.

Therefore, card holders need to prevent themselves from being credit card debtors. What they need to do is simple. First, create a budget. A good budget will helps card holders stay out of debts. They can clearly know how much they can spend and how much had they spent in a period. Secondly, pay off the balance on the credit card with the highest interest rate first. Many card holders did not notice this important point and leads to pay more interest. Card holders should pay the credits with the higher interest first to avoid the debts from increasing too much.

As a conclusion, the simplest way to avoid from being credit card debtors is by using cash instead of credit cards. One or two credit cards for emergency use are enough for a person. We must use credit card wisely to get out from debts.