Debts could be of many types but Credit card debt is an endless debt which is always on an increasing trend. This is mainly due to unawareness on the interest rates and the credit card policies. Many don’t realize that the card that they are swiping is a Credit card and not a debit card. Any money used on a Credit card is a debt after the mentioned number of days. One point that all debtors forget is the fact that when they have a certain amount due and don’t pay the entire amount- the interest rates are still charged on the “Total Outstanding Amount” and not the “Balance Unpaid Amount”.
Credit card debts are more because of lack of self control. May it be shopping or partying, people often fail to calculate if they can afford the current expenditure. When the expense is incurred on a Credit card- they do not feel an immediate pinch and start spending more which results in more credit card debts. Moreover, Credit cards usually provide a lot of attractive offers and state that they have no annual fee or are lifetime free credit cards. Usually- these come with conditions stating that there should be a minimum amount spent on a monthly basis which is usually not paid attention to. More often, this is also due to a false prestige that one carries and people prefer owning more than one Credit card. This also initiates multiple credit card debts as people tend to use one card to take care of the other. Many of these Credit cards also provide options to draw cash which involve a higher interest rate from the Day one which is never known till the statement is received. Cash back offers and Reward points are additional options to tempt the customers to do more purchases. Also, credit cards have tie- ups with many firms and restaurants and provide discounts and Easy Month Installments which leads to further debts. Getting into credit card debts is like a vicious cycle- the moment one is trapped into it- it is very difficult to walk out of it. Easy Month Installments are tempting to purchase more things that are not required at the moment. Most often, credit card debts are caused due to temptations that are easily fulfilled even when there is no enough cash in hands. Credit card debt is easy to incur but can certainly be controlled with a good presence of mind and realization of the current financial position.
