Having credit card is very common nowadays. Credit card is convenient and useful if we use it properly. However, if abuse, credit card can be the start of a years-long nightmare and unbelievable stress. Those who are relying on the credit card too much will be in debt. This is because every time when they are using credit card, they are actually borrowing the money from the credit card issuer. Therefore, they are increasing their credit card debts.
Never fully repay the total sum of debts
Many credit card users only pay for the interest and a small amount of principal when the debt is due. They will never fully repay the total sum of debts. Hence, debts accumulate an increase via the interest.
Poor money management skills
People have poor money management skills. They are unaware to conduct a monthly spending plan and do not keep track of monthly bills. They will spend as much as they get and consequently lead to a rise in credit card debts.
Unemployment
When people are unemployed, they do not have income to spend. Therefore, they will use credit card to cover their basic living expenses but at the end, they are unable to pay back the expenses.
Inflation
The prices of goods and sevices are going up but the amout of income is still the same. Thus, people are forced to spend beyond their earnings. Consequently, they will use credit cards to purchase the goods and services and then unable to pay back the expenses.
Budgeting People have to make a clear budget and stick on it in order to prevent from overspending and fall under deeper debt load.
Establish good credit card spending habits
Every credit card offers interest-free period. If possible, people are encouranged to settle all the payment before the period ends in order to avoid interest charged and stay out of debt.Never use lots of credit cards at the same time
Use just one or two cards only. Remember that credit card is not the same as free money. The lesser cards you are holding, the less probability for debts.
Using cash for payment if possible
Use debit cards or pay by cash. Both of these paying method will reduce the risk to incur in credit card debts.
In conclusion, prevention is better than cure. Be smart when using the credit cards.
~For more information, please visit to these websites:
http://www.mozdex.com/prevent-credit-card-debt/
http://ezinearticles.com/?Why-Credit-Card-Abuse-Causes-So-Much-Debt&id=1018899
But without credit card, less and less people will no go shopping because no cash to spend
credit card really make us more debt. so, better no use credit card.. buy everything with cash...