why do so many people fall into credit card debt so easily?
October 1st, 2009
sx24 asked:
A lot of people before they get credit card are determined to make full credit card payment every time and say that they can never fall behind because they are responsible. But after a short while, the determined ones also fall into heavy credit card debt and find themselves barely making little more than minimum balance payment. How come?
A lot of people before they get credit card are determined to make full credit card payment every time and say that they can never fall behind because they are responsible. But after a short while, the determined ones also fall into heavy credit card debt and find themselves barely making little more than minimum balance payment. How come?
People use credit cards to but the things there measly paychecks can’t afford.. Trouble is they don’t stop and all they can afford to pay is the mininum payment.
when you use a credit card , you do not feel like you are spending money
when you actually have to go into your pocket and pull out cash it makes you think ” do i really need this ”
when you use a card you dont think like that
and thats exactly what the credit companies want
all the best
Ian
Combination of lack of self control when it comes to sum of purchases versus actual income coupled with interest rates that border extortion.
If you have any one of these characteristics, get ready to consolidate your credit card debt.
A purse full of credit cards
Too many credit cards is the first and foremost reason which indicates that you will require debt consolidation sooner or later. Remember any transaction done with a credit card is a loan and it has to be repaid with interest. The larger the number of credit cards the more the loans.
Missing repayment dates frequently
Too many credit cards with varying repayment dates can cause a lot of confusion. If this makes you miss a repayment date just because of the number of credit cards, its time to think. Every missed installment increases your debt burden. A late payment fees along with penalty APRs can make things worse. This will surely reflect in your credit history.
Large amount of debt
Too many credit cards with small debts, result in one large debt to be repaid to multiple credit card companies. Since, the person who has to repay all these little debts each month is you, things become complicated with every increase. Read more from:
When I got my first one, I did pay off the balance every time. Then I lost my job and my new one didn’t pay as well. Even though I cut every single expense I could, I ended up charging a few things here and there. A small balance crept onto the card. After that, it was like: well, I spent $200 on the card this month and I’ll make a $200 payment. That allowed the existing balance to grow with interest. Over time, that little bitty balance grew. Two more layoffs over the next few years compounded the problem. Then I went back to school so I could get a better job…..and justified putting tuition and school costs that the financial aid didn’t cover on the credit card.
I wasn’t buying fancy things, just trying to survive a low paying job long enough to finish college. Now that I have succeeded, I worked out a budget, cut up the cards, and am dedicated to paying it all off within the next year. I had to decide to pack my lunch every day, clip coupons, not go out very much, use the library instead of Barnes and Noble, etc but I know it will feel great to get it all paid off. I make more money now but still live like I’m broke so that I can get rid of the credit card debt once and for all!
I was one of those people several years ago and was forced into credit counseling because of it.
In the real world it’s nothing but a lack of self control.
I have since changed my ways and still use my credit cards almost every day, but have not paid a penny in interest in over 3-years.
It is not always using cards badly that causes bad credit as everyone else has stated. Sometimes life happens. Say you have a credit card and you are making your monthly payments then you lose your job, get kicked out of your house, and so on. It’s not your fault that you are not able to make the payments. Itis your responsibility to get back on the right track though. I had some bad things happen to me which caused me to have horrible credit After life got straightened out I began paying off collection accts and all past due accts and am now back to good credit. It’s not always the way you spend that ill cause you to have bad credit.
People see credit cards as an easy way to get things that they want, without being able to really afford them.
The need to watch their money better, simple really.