Credit Card Debts : Causes and Preventions

Credit card debt is one of the major debts that have affected the economy in recent times. People are filing for bankruptcy, instead of settling their debts through debt negotiation and debt management. Credit card debt happens due to many causes, such as the following:

1. Poor Money Management
Poor money management is one of the main reason of why so many people accumulate lots of debt. They do not have a monthly spending plan and not keeping track of their monthly bills makes them unaware of where their money is going.

2. Saving little or not at all
Often people cannot control themselves from spending regardless of whether the purchase is nessacery or not. They will spend excessively but do not save, this lead themselves into trouble of paying the credit card debts when the bill come.

3. Financial Ignorance
Credit card debt may also due to the lack of knowlege of people on saving and investing personal finances. They do not learn how to save and how to spend wisely, they are not able to manage their finances properly.

4. Less Income, More Expenses
This situation happens when people lose their job but monthly expenses are not cut down in line wit the reduction in income. This obviously leads to a rise in debt because they are forced to use the credit card to pay all the monthly payment or living expenses.


Here are some prevention steps in order to keep you out from credit card debt:

1. Create a Budget and Saving Plan
A well thought out budget will help you to get out of debt and stay out of debt. It is important to have a plan for your money so that you will know exactly where all of your funds are going. Besides, you also need a saving plan too for rainy days. Set some amount aside for emergency use to shield yourself from surprise expenses. Saving with a goal in mind motivates many people to stick to their savings plan

2. Self Discipline
With the ease of use of credit cards, it can be easy to think you have additional funds in your wallet.In order to spend wisely, you must learn how to control and discipline to avoid overspending. You should control yourselves by follow the budget which have been planed.

3. Choose the Right Card
Choosing the exact card serves you all the well. Cards that have low or no fees at all and have interests that are low also, are the ones that are preferably appropriate especially to those who are only beginning to use credit cards.

4. Always Pay on Time
Always remember to pay your credit card bill on time, this can avoid from unnecessary debt accumulation and higher interest charges.

references:
http://www.stop-credit-card-debt.com/2008/07/24/tips-on-credit-card-debt-prevention/
http://www.buzzle.com/articles/tips-on-debt-prevention-and-management.html
http://www.buzzle.com/articles/credit-card-debt-settlements.html
http://www.3debtconsolidation.com/top10-causes.html