Causes of Credit Card Debts
Lifestyle
Nowadays, People are likely to live in the lifestyles that they preferring even they may spend more than they earn. Therefore, they find that using credit cards is the one of the way to afford their lifestyle. For example, they may prefer to have luxury living style such as to having decoration, limousine, having meal in high-class restaurant, braded clothes and so on which are the causes of credit card debt to be a lot when they unable to pay the debts.
Consumption
Due to the convenience of using credit card, people no need to bring a lot of cash goes for shopping. What they need just to bring along the light and handy credit card and purchase the merchandises and services that they want rather than to worry the insufficient cash to be consume. As a result, they would not realize how much they actually expended at the time, they will only know until the bill send from credit card bank which may causes a lot of debt need to pay.
Poor money management
Due to people are unaware to conduct a monthly spending plan and do not keep track of monthly bills and they may expensed the unexpected expenditures. People have never realized their spending on the items that are useless and do not have any value in their life. Thus, it has lead to a rise in debts by using credit cards.
Due to people are unaware to conduct a monthly spending plan and do not keep track of monthly bills and they may expensed the unexpected expenditures. People have never realized their spending on the items that are useless and do not have any value in their life. Thus, it has lead to a rise in debts by using credit cards.
How to control credit card debts
1. Avoid impulse purchases. This is a great way to save money to help credit card holders get put of debt. Only purchase items that really needed. Do not buy it if it not a necessity. An impulse purchase will only out the credit card holders further away from their main goal of being debt free.
2. Photocopy the credit card offer, including the interest rate and terms and create a letter to the credit card company/companies stating that the card holders have the idea of thinking to switching to their competition because they are offering a far more reasonable interest rate. Due to credit card companies do not want to lose card holders’ businesses. Nine times out of ten they will match or even offer a lower rate than the competition has offered.
2. Photocopy the credit card offer, including the interest rate and terms and create a letter to the credit card company/companies stating that the card holders have the idea of thinking to switching to their competition because they are offering a far more reasonable interest rate. Due to credit card companies do not want to lose card holders’ businesses. Nine times out of ten they will match or even offer a lower rate than the competition has offered.
3. Pay doubles the minimum payment if affordable. The minimum payment usually pays just enough to cover the interest and a little more that pays down the balance. Paying extra will pay the balance of debt more quickly.
4. Pay off smaller balances first. It is common for a person to try to focus on their cards with larger balances first. Pay off the smaller ones. It will take less time and card holders will feel a sense of satisfaction when they have actually completed their goal. This will boost the card holders’ confidence and make it easier to tackle the higher balances.
5. Cuts up the cards so that do not tempted to use them and only save one card for emergencies.
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