Credit Card Debts: Causes and Prevention

Everyone who owns a credit card knows that it is best to use a credit card only when urgent need arises. Use of the credit card for leisure more often than not, becomes an addiction and uncontrollable. Such a situation can often result in the creation of debts for the credit card user.

There are several causes lead to credit card debts such as:
1) Interest on interest

The main reason of credit card debts is paying interest on interest. Most of the card holders do not pay the full amount on time. This then accumulates a god awful amount of interest. The larger the balances, the larger the amount need to be repaid as you have to pay the principal amount plus a certain level of interest on it.

2) Online shopping

The opportunity to shop online has made this problem all the more severe as it is through credit cards only that the purchase are made on the internet. People do not need to spend their "real money" by paying through credit cards. People will spend continuously without noticing the risk of credit card debts as they are only required to pay a minimum payments every month.

3) Low minimum payments
Relatively low minimum payments make it easy to spend more money than you have available.

It is attractive as you are only required to pay a minimum payments every month. The balances will be carried forward and accumulated. This make the credit card debts problem arises.

4) Attractive benefits for credit card application

Credit card offers come in on a daily basis in the mailbox and it has been made way too easy for people to get credit cards. Credit card issuers also can easily approach you especially in shopping centres. Credit card applicants are always allured by the attractive conditions such as 0% interest and no annual fee. Thus, this make credit card holders always spend for the things not needed as many shops are available for easy payments.

Once created, it is not easy to get rid of credit card debts. However, there are few ways help to prevent the credit card debts such as the following:

1) Do not carry balances

If you have this habit of carrying forward your balance owed to the credit card company to the next month, it is better that you stop using your credit cards altogether. You can submit it back to the agency or cut it down to prevent any usage on urge as well.

2) Put a stop to solicitations

Off all the offers that come to your way for platinum cards etc, choose just one or two that can help you manage your debts and just stop entertaining the rest of them. You can even talk to the three main credit agencies and remove your name from the list of credit offers. The three agencies are Equifax, Experian and TransUnion.

3) Pay off more than the minimum amount

Set up a minimum amount for yourself when you repay the money owed to credit card agencies. People usually get stuck in debts and carry balances due to the urge of paying only the minimum amount mentioned by them. However, you should try to paying off as much as you can, so that the debts are removed quickly.

4) Turn to family for loan

This is one of the lowest cost way to pay off your debts. Asking for a loan from friends and family will get you a favourable interest rate as well. Make sure that all the details are done in writing so that the future is secure for both parties involved.

In conclusion, credit cards should be used for emergencies only, unless you plan on paying the entire balance off immediately. Never pay the minimum amount due unless you truly cant afford anymore. This is because it will lead to credit card debts.