Why people using credit card?? Mostly people using credit card is encouragement from banks. Banks always encourage consumer to make transaction via credit cards. All these cause credit card holders increase dramatically. Furthermore, banks give a lot reward to card holder who spends higher amounts of money will get a grand prizes or money rebates. This also makes a lot card holder bankruptcy and having debts.
Causes of credit card debts
1.Poor finance management
- Purchase using credit card is very convenience because consumers is using future money without develop any plan. Thus, people do not aware amount of money
their spending. At the end of the month, they only realized that they are carrying
a huge debt after receiving monthly statement.
2.Unemployment
- Due to bad economies, many people lost their job and unable to maintain their
living expenses, so people using credit card to cover their future living expenses.
They doing like that because they need to cover their expenses purpose to maintain their current lifestyle. This may lead to a rise in debt if their expenses
are not cut down.
3.Cycle effect
- People continue using credit card will fall into a cycle of creating and paying of credit card debts. Once the debts excess their income, the interest of debts or late payment charge are coming. The extra charge makes the debts become larger and larger. At the end, pay for debts is never end.
Prevention of credit card debts
1.Budget planning
- Budget planning is a best method to help people manage their own finance.People need to learn self-control to spend and able to overcome their debts.Thus, debts would not create.
2.Downsize the credit limit
- People cannot always think that credit card is not an unlimited credit card, if card holder think this is an unlimited credit card, they will not limit their spending.
3.Commit a budget to writing
- controlling spending is the way to prevent excessive credit card debts. Write down all the budget down then you will know and clear where u money spend to, how much u spend in this month and how much left in this month. Besides that, when you know you almost over budget then you will start to control you spend.
References:
1.http://www.nurido.at/news/understanding-causes-of-credit-card-debt-problems-123653.html
2.http://www.finweb.com/banking-credit/helpful-tips-to-control-excessive-credit-card-debt.html
Causes of credit card debts
1.Poor finance management
- Purchase using credit card is very convenience because consumers is using future money without develop any plan. Thus, people do not aware amount of money
their spending. At the end of the month, they only realized that they are carrying
a huge debt after receiving monthly statement.
2.Unemployment
- Due to bad economies, many people lost their job and unable to maintain their
living expenses, so people using credit card to cover their future living expenses.
They doing like that because they need to cover their expenses purpose to maintain their current lifestyle. This may lead to a rise in debt if their expenses
are not cut down.
3.Cycle effect
- People continue using credit card will fall into a cycle of creating and paying of credit card debts. Once the debts excess their income, the interest of debts or late payment charge are coming. The extra charge makes the debts become larger and larger. At the end, pay for debts is never end.
Prevention of credit card debts
1.Budget planning
- Budget planning is a best method to help people manage their own finance.People need to learn self-control to spend and able to overcome their debts.Thus, debts would not create.
2.Downsize the credit limit
- People cannot always think that credit card is not an unlimited credit card, if card holder think this is an unlimited credit card, they will not limit their spending.
3.Commit a budget to writing
- controlling spending is the way to prevent excessive credit card debts. Write down all the budget down then you will know and clear where u money spend to, how much u spend in this month and how much left in this month. Besides that, when you know you almost over budget then you will start to control you spend.
References:
1.http://www.nurido.at/news/understanding-causes-of-credit-card-debt-problems-123653.html
2.http://www.finweb.com/banking-credit/helpful-tips-to-control-excessive-credit-card-debt.html
No comments:
Post a Comment