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Credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holders promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.
Recently, we live in a world where debt is not only acceptable, it is the norm. Almost everyone we meet has debt of some kind. So, in a society that views debt as a way of life, how can we control our debt instead of allowing it to control us? Here are some steps to help you with credit card debts prevention:
· Know Your Interest Rate - If you’re going to use a credit card, regardless if you pay the balance in full each month, you need to know the interest rate. In addition, check the rate on your monthly statements because credit card issuers can raise your rates for little or no apparent reason and with little warning.
Recently, we live in a world where debt is not only acceptable, it is the norm. Almost everyone we meet has debt of some kind. So, in a society that views debt as a way of life, how can we control our debt instead of allowing it to control us? Here are some steps to help you with credit card debts prevention:
· Know Your Interest Rate - If you’re going to use a credit card, regardless if you pay the balance in full each month, you need to know the interest rate. In addition, check the rate on your monthly statements because credit card issuers can raise your rates for little or no apparent reason and with little warning.
· Pay on Time - Due to the universal default clause in credit cards’ terms and conditions, credit card companies can raise your interest rate if you are late paying any creditor or even your utility company.
· Limit the Plastic in Your Wallet - Having a wallet full of plastic can make it tough to keep track of how much you owe on each , which can spell trouble when it is time to pay your statements as every credit card comes with its own set of terms and conditions·
· Limit the Plastic in Your Wallet - Having a wallet full of plastic can make it tough to keep track of how much you owe on each , which can spell trouble when it is time to pay your statements as every credit card comes with its own set of terms and conditions·
Early Education - The best method for prevention is teaching our youngest generation all about money before they even qualify for a credit card. In addition, advertisers market more to younger and younger children, so it’s imperative to teach them very early about the lure of money and how to manage finances.
Below are some causes of credit cards debts :
· Poor Money Management - Not having a monthly spending plan and not keeping track of the monthly bills makes people unaware of where their money is going. They might be spending hundreds of dollars every month towards items that are useless and have no value in their life. While their money is going towards purchasing useless items, they might also be charging their necessary purchases on credit card, forcing them to pay interest on these purchases every month.
· Saving too little or not at all - The simplest way to avoid unwanted debt is to prepare for unexpected expenditures by saving three to six months of living expenses. With a savings cushion in place, a job layoff, illness or divorce will not cause immediate financial strain and increase debt.
· Financial illiteracy - Many people don't understand how money works and grows, how to save and invest for a rainy day, or even why they should balance their checkbook. The schools don't teach it or parents may not have sat their children down and explained it. It doesn't matter. We are responsible for our life and our money anyway.
· Reduced income/same expenses - Too often we delay bringing expenses in line with a reduction in income for a host of good reasons and let debt fill the gap. The sooner you adjust to your new reality, whether it be temporary or permanent, the better off you'll be.
Related links:
http://www.bankrate.com/brm/news/debt/debt_manage_2004/top-10-causes.asp
http://www.3debtconsolidation.com/top10-causes.html
http://www.cardratings.com/howtoavoidcreditcarddebt.html
http://www.itsahabit.com/
http://www.creditcards.com/credit-card-news/debt-prevention-tips-1267.php
· Poor Money Management - Not having a monthly spending plan and not keeping track of the monthly bills makes people unaware of where their money is going. They might be spending hundreds of dollars every month towards items that are useless and have no value in their life. While their money is going towards purchasing useless items, they might also be charging their necessary purchases on credit card, forcing them to pay interest on these purchases every month.
· Saving too little or not at all - The simplest way to avoid unwanted debt is to prepare for unexpected expenditures by saving three to six months of living expenses. With a savings cushion in place, a job layoff, illness or divorce will not cause immediate financial strain and increase debt.
· Financial illiteracy - Many people don't understand how money works and grows, how to save and invest for a rainy day, or even why they should balance their checkbook. The schools don't teach it or parents may not have sat their children down and explained it. It doesn't matter. We are responsible for our life and our money anyway.
· Reduced income/same expenses - Too often we delay bringing expenses in line with a reduction in income for a host of good reasons and let debt fill the gap. The sooner you adjust to your new reality, whether it be temporary or permanent, the better off you'll be.
Related links:
http://www.bankrate.com/brm/news/debt/debt_manage_2004/top-10-causes.asp
http://www.3debtconsolidation.com/top10-causes.html
http://www.cardratings.com/howtoavoidcreditcarddebt.html
http://www.itsahabit.com/
http://www.creditcards.com/credit-card-news/debt-prevention-tips-1267.php
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