Commons reasons for credit card debt

Commons reasons for credit card debt:


Missing payments - To avoid this clients with constant credit card debt are advised to set up a direct debit.

General overspending - To avoid this only use credit card when you are sure you can pay the balance off at the end of the month.

Clients being loyal to credit card providers - Always change your credit card provider once the low or interest free period is over. Remember credit card companies have no loyalty to you so don't be loyal to them.

Having too many credit cards - The more credit cards a person has the more likely they are to use them. To avoid this only use one or two at a time.

Expensive payment protection insurance - Most premiums are high with payment protection insurance and the payout conditions are very questionable.

Not prioritising debts - Credit card debt is built up by not paying expensive credit card debt first.

Get advice too late - Clients bury their heads in the sand. We call this the ostrich debt condition.

Getting advice from the wrong places - Avoid getting advice from credit card debt advice firms who advertise on TV, Radio or in the tabloids.

It definitely spirals out of control. So much of it mind tricks- convincing yourself you'll have the money later or be able to pay it off.

And some of the terms can be pretty confusing on those cards. Universal default, for instance, can raise interest rates on all of your credit cards, even if you've only missed a payment or two on one account. So it pays to stay on top of it as best you can.

I think overspending is the main reason for the debt. credit cards should be used wherever they are needed. You can try comparing the features of various credit cards. This helps in avoiding debts.

What is the point of having a credit card if you have to pay the entire balance off at the end of the month?  I sometimes let the balance stay on for a few months, so I don't have to drain my account if I make a big purchase, such as new tires for my car, etc.  And if I pay $3 in finance charges, bug deal.  It isn't the end of the world....  I think that people freak out way too much if people carry a small balance for a few months on a card with a large credit limit..... 

I am curious, then, about how you feel about small businesses and credit card debt? I often find myself having to layout money for inventroy at certain times of the year where it is convienant for my vendors, but financially difficult for me.  As a result, I am forced to pay in credit and drag that debt around for several months before I can pay it off . . . ????

Actually, statistics show that the primary reason for credit card debt is people buying or paying for items they can't afford on their regular incomes. They use the credit cards as a top up for the short-fall in their own incomes, which creates the spiral.

This is just bad spending habits being justified. If you can't afford to save for the things you want then you can't afford them.

Let's add 

Divorce and

Loss of a job

Which is what got me into debt. 

Overspending and having a husband who overspends worse than I do! He earns the money, he spends the money and I try to work out how to pay the bills!

Precisely, husband and wives should work as a team especially when finances come into the picture.  Money is the number one item that couples fight about the most.

If I am lucky enough to get married again, that is the first topic my future husband and I will discuss.  We have to agree on a budget, that is an absolute  no brainer.  Neither one of us will have "control" over the finances, it will be worked out as a team and done together.  Not only will we be debt free, but our marriage will flourish becaus of it.