Credit Card debts: Causes and prevention

Credit card debts result when the user of a credit card purchases an goods or service through the card system. When the user of credit card does not pay for the money spent, the debt accumulates and increases through interest and penalties which usually in high rates.
The causes of the great amount of debts are mostly unconsciousness of user on the amount used to pay for goods or services by credit card. Some of the users only realized that they had great debts on credit card when the monthly statement is received. Great debts frequently come into the picture for those who are addicted to shop and make payment using the credit card. The knowledge and understanding of the credit card user is not sufficient to make planning in using the credit card and repaying the debt. Purchasing goods or services by credit card can also rephrase as purchasing goods or services using the future money which has not be earn. Therefore, the debts also commonly caused by credit card user unable to repay the debts because usually they spent more than what they earn which cause the user only affordable to repay the minimum amount for long period.
There are prevention and signal to show that the credit card users are on path to fully repay the debts. Purchase goods or services for petty amount by available cash or by debit card is the best. The raw idea of using credit card is to think twice before payment is made on some of the goods or services that are not in priority in the daily life, this will avoid the user from being trap by debts. The key to remember in using credit card is spent more pay more, spent more than earn debt is also more. There is expert suggested that pay the balance with the highest annual percentage rate first then move onto the debt with the next-highest interest rate. This will help the user to reduce the interest burden in repaying the debts. Good signal to be given if the credit card user able to repay the debts more than the minimum amount require for each month because it tells that the debts can be repay in less interest and in shorter period. For credit card user, it is advised to have full understanding on credit card and the consequence in using it. Comprehensive planning on using credit card and repaying the debt is a “must” to prevent attacked by creditors and warning letters.
Causes of using credit card and prevention on unlimited debt that has been discussed can be references to pre – credit card user to consider and be alert.