Causes Of Credit Card Debt

what are the main causes of credit card debt?

A lot of people use credit cards as a "crutch." If they can't afford something they really want, they charge it. Then when it comes time to paying the bill they pay the minimum amount due (very bad thing) only. This then accumulates a god awful amount of interest and the next month when you get your bill, the balance is about the same. Credit cards should be used for emergencies only, unless you plan on paying the entire balance off immediately. Never pay the minimum amount due unless you truly can't afford any more. Try to double up on the payment and when you get extra cash, rather than spend it, apply that towards the principal. Once it's paid off, use the money you would have used to pay that credit card and use it towards paying off another debt.

Credit card offers come in on a daily basis in the mailbox and it has been made way too easy for people to get credit. You just have to remember that you have to pay off what you borrowed. I got a credit card 7 months ago and still haven't used it. If I can't afford to buy something with cash then I just don't get it. If my car breaks down...that's a whole different story!

2007-07-22 15:01:02 by calvin has another question

In which John explains the Greek debt crisis, which has pushed the Greek government close to defaulting on its loans, the reasons why the Euro ...

What is the factor that cause credit card debt in term of economics? I only know "expense via credit card to income ratio" ... are there other factors?

it's the "gotta have it now" gene... we all want things now, rather than working and saving for them.... people think "I can afford the payments" even though they could never afford the item itself.... then they end up paying more than twice what it's worth.

people need to listen to Dave Ramsey... the world would be a better place.

2007-03-13 05:30:38 by sirinipha_prae

OK, I'm 32 years old. The only debt I have is my mortgage. I have a credit card for an emergency, and If I want something, I wait until I have enough money. Do you think that the people that have little or no credit card debt suffering less than those that were fiscally irresponsible?

Strangely enough, a healthy economy relies on people being willing to go into debt.

If someone buys something on their credit card then the store that sold that product, the factory that made it, the bank and even the Inland Revenue make money.

That means more people were working, producing what was bought, they earned wages and they bought other things which also provided employment to other people.

I am like you. I prefer good housekeeping and no debts, but the economy relies on people spending what they cannot yet afford.

People with less debt always suffer less personally in a recession.

2009-01-08 02:12:07 by Marque and Reprisal

Would you spend you "extra" money on paying off your credit card debt or on therapy, which is causing more debt because I can't afford it?

I'd work on paying off the credit card debt but I would look for a sliding scale location to get therapy so you would be able to do both. As intelligent as you are here, I assume you know where to find sliding scale locations near you. If you need the SAMHSA locator, email me. Good luck!

2008-09-23 21:13:48 by @@@@@

Gambler caused 135k worth of credit card debt. Is in ga now and in therapy. I don't want to get in deeper trying to fix this? what is the best direction to go from here.

Please don't go to a debt management agencies unless its free upfront costs and monthly charge to many times I have seen people pay out for these places and they either keep the money to save up for settlement cost or charge you an *** load of money. First what I would do is go to www.annualcreditreport.com this is site that you can get your credit report for free, you do not need a credit card, registration or an account number they will just ask questions found on your report, the only catch is you can only do it once a year for 3 of the major credit bureaus. Now attacking debt of course will not be easy what you want to do is create a budget net income, monthly expenses (rent, mortgage, gas, food, insurance, etc) a realistic budget that you can live off of. Then you want to list your monthly debt with the minimum payments and find how much you have left over. This will show what your financial situation if your negative then we need to make either lifestyle changes, or speak to creditors, if its positive than we need to form a power pay plan to pay off the creditors. If you are negative call each and every creditor and ask for there "hardship department" and explain them your situation you never want to settle this will charge off the credit card and then you would claim the difference as reportable income and pay taxes. The hardship department at each creditor should be able to place you on a fixed payment program and reduced interest rate amount this should help us in our budget. So with changes in our budget and we are positive what you want to do is start with the lowest balance creditor and work to pay them off first, after we payoff that creditor we add the monthly amount to the next and so on this will power pay your accounts done so you will save time, interest, and increase your credit score at the same time. Your credit score is broken up into 5 parts.
Payment history- 35% make your payments on time
Balance- 30% the more your towards to the limit of your card your score goes down keep your balances under 25% towards your score and should not have quite an impact (i.e $1,000 credit limit, $250.00 balance)
Length of history- 15% this takes the average account life so if you took out a credit card in 2000 and then just open another card this year your average life 4 years. While your paying off your debt please do not take out any new credit cards this affect this portion of score and further increase your debt with more credit
Inquiries- 10% applying for loans, credit cards, mortgages, etc affects your credit since were not opening new cards this shouldn't affect you, but if you do make sure you apply to as many lenders as possible within a 14 day period this credit bureaus understand that people shop for the best rate so make sure you can advantage of that because it only hits your score once during that period
Types of credit 10%- they like to see that you have a variety of credit mortgage, installment loan, credit card, line of credit, etc but if you have several loans, and credit cards it looks bad.

2008-11-22 05:23:33 by sissy