Ouch ! ! ! Credit Card Debts: Causes and Prevention

Credit is a method of selling goods or services without the buyer having cash in hand. A credit card is only an automatic way of offering credit to a consumer. Today, every credit card carries an identifying number that speeds shopping transactions. Imagine what a credit purchase would be like without it, the sales person would have to record your identity, billing address, and terms of repayment.

Each issuer produced one card with one set of features. Today, credit cards come in multiple levels with ranging interest rates, fees and reward programs, so before you fill out an application, it's important to know which will best suit your financial situation and lifestyle.

CAUSES

Credit card debts result from when a client of a credit card company purchased an item or services through the card they use. Debts accumulate increase with interest and penalties for late payment had made the total amount due become larger.
Credit card debt is said to be increasing in the industries areas. Sometime the late fees, over the limit fees, high annual percentage rates, and universal default overcome customer who frequently do not pay off their debts, and the customer declares bankruptcy.

The real culprit behind the scenario is the desire to spend money. Many other culprits seem to be the causes of credit card debts such as lack of concern that their unable to meet the credit card payment obligation. There is no creditor hounding us for the payment and lack of self-discipline in dealing with credit management. We never know how to spend wisely and every single cent spend go toward keeping up with the minimum payment. Unfortunately this distressing situation is the common norm of many people.

Another negative consequence of using credit card is that you will never feel like you are spending the real money. The pleasant feeling you experiences when you purchase the items are disconnected from the unpleasant feeling of making the credit card payment when received the statement. To get control of your credit card spending you need to examine what money really means to you. Studies show that people with low self-esteem tend to purchase more the thing they don't need.

PREVENTION

1.Repay sensibly to payoff what you owe. Small step can be a huge different.
Learn how to make a realistic repayment plan and follow the five ways to reduce your debts.
Pay more than the minimum payment each month, if you ever hope to pay off your credit card debt. You must also pay on time or a finance charge will be added onto the total, creating a larger minimum payment for the next month — and a larger finance charge added to the total again if you don’t pay it. Get a system for credit card debt reduction. You need your own deadline each month for paying bills.Negotiate with credit card companies. The amount of credit card debt in this country has made creditors realize that if they don’t want people backing down from their obligations completely. If you have a limited budget for debt reduction, write letters to each of your creditors acknowledging the situation, and tell each one when you can begin repayment. If you have a limited budget for debt repayment, write down what you can pay each creditor each month.

2.Get Financial Healthy
It seems the better consumers get at paying off their credit card balances each month, the nastier the companies get.
Don’t be a revolver
The first rule of credit cards is avoiding the nefarious “balance.” Carrying a balance means paying far more than you should for everything your charge to your card. And it is one of the fastest ways to fall deep in debt.
Read Everything
Read every form for any potential credit card account with a magnifying glass.
Avoid Late Fees
One late payment and you are immediately socked with a late fee.
Fight Back
If your credit card issuer is squeezing you, complain. Competition among credit card companies is fierce. Use that leverage to get what you want. Often you can get a late fee waived or your interest rate lowered just by asking. Most companies will make adjustments at least once.
Shop around
There is a lot of fish in the sea. There is no reason to hold a card that has a high interest rate or a short grace period. Go “rate surfing.” Get the interest rate you want. Get a card with no annual fee. Compare the rates and terms of several cards.
Check Your Credit Report
An especially dirty trick played by the companies is not reporting a good customer’s on-time payment history to a credit bureau, lest competitors steal their customers. So if you are planning on getting a mortgage or other loan, it is a good idea to ask whether the company is reporting your good payment record to the credit-rating bureaus when you check your credit report. But check a few months before applying for a mortgage, which gives you time to correct any mistakes.
Stop spending
Ultimately, this rule will make the most difference in your financial life. Make it hard to use your card. Don’t leave home with it. Financially healthy people do not use credit cards for borrowing money and paying it back over long periods of time at high interest rates. They do not buy things they can’t afford. Many people mistakenly believe they’re on top of things as long as they make their minimum payments religiously and on time. But they’re not. Keep a card on hand for emergencies. The rest of the time, keep it frozen in the middle of a carton of milk.