Credit card debts: Causes and Prevention

A credit card can also be called as a charge card. It allows the consumers to purchase the products and services without using cash and only have to pay them at a later date. Thus, many card holders tend to take advantage of it and start spending impulsively. This is how they started to accumulate credit card debts. What causes them to be the credit card “slaves”?


Poor Money Management
Many credit card holders failed to manage their money properly. When they have free time, they will go shopping without having any purpose or target in mind. Hence, they spend hundreds or thousands of dollars each month buying things which are not needed and without realizing their excessive spending until the credit card bill arrives.

Low Income, High Expenses
Normally this will happen when there is a member in the family who has lost his/her job, rendering the total income of the family to shrink. With less cash in hand, people will start to rely on credit cards to make ends meet, having in mind that they will certainly be able to find a way to pay for the debts later on. Also, the purchasing habit of a person who relies on credit card heavily is not easy to change as a habit is not cultivated in just one or two days. It takes time before people can make adaptation to his/her buying behavior.

Non Financial Communication
Non financial communication is also one of the causes that contribute to the credit card debts. Parents should communicate more with their children about the current financial situation in their family. Without proper communication and sufficient understanding of the current situation, children will continue to be a big spender (i.e. loves to buy expensive branded goods using parents’ credit card) without realizing that the family in fact could not afford these luxury goods. Ultimately, the parents who are the credit card holders had no choice but to struggle to find ways to pay for the heavy credit card debts.

Since the credit card debts issue has become a burgeoning problem in this modern society today, here are some useful tips for its prevention measures.

Treat your Credit Card as your Cash
Always think of your credit card as a sum of cash that you hold it with you. For instance, set an appropriate amount of money that you can use on your credit card. Once it reaches the limit which you have preset, cease using the credit card. Also, every time you swipe your credit card, think of how many pieces of “imaginary” cash notes is gone and how many is left in your credit card. This way, you will have a better idea of how much you have spent and how much is left for you to spend.

Control Yourself
You should know your own ability to afford for certain items. The expenses you spend monthly should not exceed the amount of your income. If ever you have the urge to buy something which is out of your budget, think twice, and analyze whether it is really needed or not. You should be able to stay conscious and control your own buying desire before things are too late: feeling regret of bringing unwanted things home.

Good Finance Management
A well management of your finances will prevent you from getting loaded with credit card debts. You should determine your own monthly budgeted expenses and follow closely to your budget. The budget should only include the expenses for your daily necessities and perhaps some extra money for you to satisfy your shopping desire. However, this should not be an opportunity for you to spend excessively by swiping your credit cards. With a proper management of finances, you would not face the credit card debts problem at all.

Related Links:-
Credit Card Debt Resources
Credit Card Debt