Credit Card Debt is the unpaid balance on the credit card. This is not the minimum amount due, but is the total balance due on a respective line of credit. When the consumers has been late on a payment or does not pay the bank on time for that the money he or she has spent. Then, the bank will charge a late payment penalty and increases via interest on the amount of debt the consumer has.
Nowadays, credit card debts are major cause of bankruptcies each year. It is because many people have never realized of its consequences from financial and non financial perspectives when get a new credit card or not enough safety net when there is an incident happen.
The following is the main reason of the credit card debt:
POOR MONEY MANAGEMENT
A monthly spending plan is essential. But they does not know where their money is going, do not know what is the percentage of their income have they saved each and every month. Thus, it has lead to a rise in debts by using credit cards. Then, they cannot set aside money for saving and emergency needs.
GAMBLING
Today, gambling is fun and entertaining but it will be hard to stop when it becomes addictive. Thus, it will surely lead to a financial disaster if borrowing money through credit card for gambling.
UNEMPLOYMENT
People are forced to use credit card for expenses purposes to maintain current lifestyle. When the main breadwinner of the household has loss his job and could not find a new job during short periods. This may lead to a rise in debt when expenses are not cut down in line with the reduction in income.
EXCESSIVE MEDICAL EXPENSES
Credit card will probably become one of the sources of funds to pay off the medical expenses if health insurance is not adequate to cover the medical bills if one of your family members suffers serious illness.
The following is the ways to prevent credit card debt:
BUDGET
List all monthly bills and necessities and make sure that you can meet all the basic necessities that you spent and stay within your budget guidelines. this will prevent from overspending and fall under deeper debt load.
SELF CONTROL AND DISCIPLINE
One of the best practices is to have a direct set up so that able to pay back the full amount each month and use in emergencies. Thus, self control and discipline to keep these cards in wallet and would not overspend. The
CAUTION ABOUT AGREEMENT
make sure you have read word by word in all the agreements before u signed and make a payment. Sometimes, there could be hidden some fees that we does not need to pay.
Nowadays, credit card debts are major cause of bankruptcies each year. It is because many people have never realized of its consequences from financial and non financial perspectives when get a new credit card or not enough safety net when there is an incident happen.
The following is the main reason of the credit card debt:
POOR MONEY MANAGEMENT
A monthly spending plan is essential. But they does not know where their money is going, do not know what is the percentage of their income have they saved each and every month. Thus, it has lead to a rise in debts by using credit cards. Then, they cannot set aside money for saving and emergency needs.
GAMBLING
Today, gambling is fun and entertaining but it will be hard to stop when it becomes addictive. Thus, it will surely lead to a financial disaster if borrowing money through credit card for gambling.
UNEMPLOYMENT
People are forced to use credit card for expenses purposes to maintain current lifestyle. When the main breadwinner of the household has loss his job and could not find a new job during short periods. This may lead to a rise in debt when expenses are not cut down in line with the reduction in income.
EXCESSIVE MEDICAL EXPENSES
Credit card will probably become one of the sources of funds to pay off the medical expenses if health insurance is not adequate to cover the medical bills if one of your family members suffers serious illness.
The following is the ways to prevent credit card debt:
BUDGET
List all monthly bills and necessities and make sure that you can meet all the basic necessities that you spent and stay within your budget guidelines. this will prevent from overspending and fall under deeper debt load.
SELF CONTROL AND DISCIPLINE
One of the best practices is to have a direct set up so that able to pay back the full amount each month and use in emergencies. Thus, self control and discipline to keep these cards in wallet and would not overspend. The
CAUTION ABOUT AGREEMENT
make sure you have read word by word in all the agreements before u signed and make a payment. Sometimes, there could be hidden some fees that we does not need to pay.
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