Credit Cards Debts:Causes and Prevention

hi~~welcome to eeeeecom.blogspot again~~ I am going to tell you guys about the credit card debts causes and how to prevent it.

Credit card debts accur when client of a credit card company purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent.Many families are now experiencing severe financial problems. The problem is it is just too easy to spend money but now people are looking for ways to try and pay off the thousands they owe to thefinance companies. Once this point has been reached then it only remains for some form of relief from the credit card debt to be arranged.

Here's some of the causes of credit card debts:

1. Poor Money Management
Poor money management is one of the best reasons why so many families accumulate lots of debt. Not having a monthly spending plan and not keeping track of your monthly bills makes you unaware of where your money is going. You might be spending hundreds of dollars every month towards items that are useless and have no value in your life, yet you do not realize it. While your money is going towards purchasing useless items, you might also be charging your necessary purchases on your credit card, forcing you to pay interest on these purchases every month.

2. 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.

3.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.

4. Hoping to win the lottery
Most people hope to win the lottery but the chances of that happening are 0%. Do not spend tomorrow's saved money today just because you expect a promotion in your job or are expecting an inheritance from a deceased grandfather. We all know life is unfair and things can go wrong more easily than going right.

5. Saving little or not at all

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, your parents may not have sat you down and explained it. It doesn't matter. You are responsible for your life and your money anyway. Financial mistakes are increasingly expensive and complicated to resolve.

How to prevent it?

1.Obviously, the easiest way to to stop using the cards altogether as continued use will just compound the problem and make it harder to resolve.

2.Establish a budget and then follow that budget exactly. In other words, don't be tempted to charge that plasma TV to your credit card on a whim when you haven't budgeted for it this month.

3.Get a low interest credit card, if your credit card's interest rate is excessive. The better your credit, the lower the rate for whichy you will qualify.

4.When you can, use cash, not credit! If you carry a balance, use your card for as little as possible -- when you write checks, use a debit card or fork over cash for each purchase, you'll be more conscious of your spending and will end up spending less.

5.Negotiate with credit card companies. The amount of credit card debt in this country has made creditors realize that if they want to get any money back, they have to make deals! If a card charges an annual fee, ask that it be removed. Many cards don't charge a fee, so you can always switch to one of these cards. Most credit cards will remove the fee if you simply ask.

These tips should get you started

Credit card clients need to cut out habits that make you spend more by using credit card.You do not build wealth with credit cards.Prevent it before things getting worst!!