Credit Card debts: Causes and Prevention.

IN TODAY'S WORLD

What thing can possibly be more important other than money itself ?

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Yeah, without a doubt, money is freaking important.

We NEED it to buy foods.

We NEED it to pay our rental.

We NEED it to buy fuel for our car.
and I NEED it to buy gifts for my girl-friend.

However, knowing that money is very important, many people tend to use their "future" money by applying credit cards.

In the end, most of them tend to overspend and created huge debts for themselves.

Why? What could it be possibly causes this to happen ?

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Poor Money Management

We tend to spend on unnecessary things that leads to wastage of money. Some people buy heavily expensive things without worrying they could or could not pay back in the future.

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Saving too little or not at all

Many people don't eventually have the habit of saving money nowadays. During critical periods, they couldn't meet up to the unexpected expenses which may cause them to have a financial downturn.
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Banking on a windfall

Spending tomorrow's money today is very tempting. Especially if you believe that tomorrow will come no matter what. A planned job bonus may not be a sure thing. The inheritance that you believe will come your way may not. The lesson is don't spend the money until the check clears.

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Heavy medical expenses

Gaps in coverage, lapsed policies and increasingly costly alternatives make this a popular category. Just about every doctor now takes credit cards. If you think it's for convenience, think again. The medical industry wants to get paid at the time service is rendered. They know that if they don't, the chances of their getting paid drops. This means more debt for you, less for them. To be fair, they are not in the lending business, but this only masks a bigger problem

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Reduced in income

We often let debt takes us in when there's reduced in our income by the hope that we will find another source to pay back in the future

After you know the reasons for us to overspend, now, how are we going to curb this problem?

Here are some safety measures that can be taken.

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First~

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Establish a budget and follow that budget exactly

It is advisable for you to have a budget of your on to control on your daily expenses. After creating your budget, make sure you follow them exactly

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Do not carry your credit card balance for more than 6 months

Experts indicates that beyond that 6 months point, the compounding of simple interest can produce a very expensive balance to pay off. This can be shown through the snowball effect.

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Avoid using credit card

Try avoid using credit card n your daily expenses and use cash instead. You barely see the amount that you're spending thus may cause you to spend more than what you can eventually afford.

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Self decipline

The final purchasing decision always lyes in your hands at the edge of the cash counter.

Control your self, know what you need and what you don't. Try not to buy unnessary things that could lead to overspending.

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The End