Nowadays, people like to be a credit card holder, because it can bring them convenient and attraction. On the other hand, it also can bring over some trouble for them such as bankruptcies.
First, unemployment is one of the causes. Households are forced to use credit card for groceries, utilities and some expenses purposes to maintain current lifestyle when the main breadwinner of the household has loss his job and could not find a new job during short periods. This may lead to a rise in debt when expenses are not cut down in line with the reduction in income. Second, is gambling. Today, gambling has become part of entertainments in our life. It is hard to stop when it becomes addictive. Thus, it will surely lead to a financial disaster if borrowing money through credit card for gambling. Third is divorce. Fees that must spend for divorce such as lawyer fee, division of assets between husband and wife, proceeds given to children are the way to rack up huge debts by using credit card if it is the gap between the expenses and income. Moreover, it will lead to reduction in income because divorce may force some people to quit their job and to have a walk in other countries.
First, unemployment is one of the causes. Households are forced to use credit card for groceries, utilities and some expenses purposes to maintain current lifestyle when the main breadwinner of the household has loss his job and could not find a new job during short periods. This may lead to a rise in debt when expenses are not cut down in line with the reduction in income. Second, is gambling. Today, gambling has become part of entertainments in our life. It is hard to stop when it becomes addictive. Thus, it will surely lead to a financial disaster if borrowing money through credit card for gambling. Third is divorce. Fees that must spend for divorce such as lawyer fee, division of assets between husband and wife, proceeds given to children are the way to rack up huge debts by using credit card if it is the gap between the expenses and income. Moreover, it will lead to reduction in income because divorce may force some people to quit their job and to have a walk in other countries.
It's not that hard to get a credit card, but we want to make sure that we are at a decent annual percentage rate, that won't bankrupt us when we see the first payment being due. Here is some prevention method for credit card debt. Which we just sign up for companies that is willing to offer us a low percentage rate. Make a budget. Create a budget that includes monthly bills, miscellaneous expenses, try to avoid the expensive purchases and do not spend it on unimportant things. Self control and discipline. One of the best practices is to have a direct set up so that able to pay back the full amount each month and use in emergencies. Thus, self control and discipline to keep these cards in wallet and would not overspend.
Credit card can bring us pros and cons. Card holder should use it in the smart way, and stay with a well financial situation.
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