Credit card debt
‘Credit card debt’ is a much discussed topic in the
commercial and social circles. A big section of the population
has been bit by this bug called ‘credit card debt’. Can’t blame
them much; as such, it’s pretty easy to fall prey to this
bug.
The main reason behind so many credit card casualties
(rather credit card debt related casualties) is that many
people don’t understand the concept of credit cards properly.
They treat credit card as free money that is never to be
returned. Thus all the discipline, which would otherwise have
been exercised with spending hard-earned money, goes for a
toss. That means people overspend and get into credit card
debt. They keep spending till they reach the credit limit
on their credit card. Some people go to the extent of treating
that like a game and consider it a defeat (or consider their
credit card under utilised) if they don’t hit the credit limit
quick enough. These unnecessary spends result in a situation
where they are not able to payback their credit card bills and
end up paying interest on the amount they owe. This keeps
building up their credit card debt and they soon find that the
interest component has become a regular feature in their
monthly expenses and it is there even if they spend nothing on
their credit card. That is credit card debt on the prowl. Soon
they find that their current credit card can no longer handle
their needs and start looking to get another credit card. With
the new power of credit, they let themselves loose again and
follow a ‘shop till you drop’ routine. Soon the credit limit of
the new credit card is reached too and they again default on
payments. This is how credit card debt builds. Soon they learn
about credit card debt consolidation and other credit card debt
elimination techniques. They are quick to grab such credit card
debt reduction techniques, but that’s not because they are
serious about reducing their credit card debt but because of
the attractive low APR offers. As if it were booty, they again
get back to building up their credit card debt. All the while
they are spoiling their credit card rating and they soon
realise that no one is ready to lend them money because of
their credit history. They can only get a secured credit card
now (where you first deposit money into your credit account and
then only you get the privilege of spending it (50-100% of it)
using their credit card. Credit card debt collection agencies,
auction of their goods and bankruptcy is the next thing that
hits them and their dream run is blown away in a moment.
The moral of the story – “Understand the concept of credit
cards and treat credit card debt with all seriousness”.
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