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Credit Card Debt

By Guest Author On December 6, 2010 Under Personal Development

Credit card debt is a much discussed topic in both financial and social circles. A large section of the population has has gotten itself into trouble with credit card debt.

The main reason for so many credit card related casualties is that many people don’t understand the idea of credit cards properly. They treat credit cards as free money. So all the discipline, which would otherwise have been exercised when spending hard-earned money, goes by the by.

Which means that people overspend and get into credit card debt. They keep spending till they reach the credit maximum on their credit card. Some people treat it 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 state where they are not able to pay back their credit card debts 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 normal feature in their monthly expenses and it is there even if they spend nothing on their credit card. That is credit card debt at its worst. Soon they find that their present credit card can no longer satisfy their needs and they start looking around to get another credit card. With the additional credit, they let themselves loose again and follow a keep spending routine. In a little while the credit limit of the new credit card is reached too and they again shirk on payments. This is how credit card debt accumulate.

After a while, they might learn about credit card debt consolidation and other credit card debt elimination methods. They are quick to grab such credit card debt reduction methods, 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 go back to building up their credit card debt. All the while they are spoiling their credit card rating and they soon come to understand that no one is prepared to lend them any money because of their credit record.

At this point, they can only get a secured credit card (ie where you first deposit money into your credit card account and then only do you get the privilege of spending it (50-100% of it) using a credit card. Credit card debt collection agencies, the auction of their goods and bankruptcy is the next thing that awaits them and their dream is blown away in a flash.

Don’t get caught up with credit card debt. You cannot win, unless you die.

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