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Article by Owen Jones

Credit card debt is a much discussed topic in both commercial 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 cash, goes by the by.

Which means that people overspend and get into credit card debt. They keep spending till they arrive at the credit limit on their credit card. Some people treati 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 condition where they are not able to pay back their credit card debts and end up paying interest on the amount they owe.

This keeps increasing their credit card debt and they soon find that the interest component has become a standard element 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 realize that their present credit card can no longer handle their requirements and they commence looking around to get another credit card. With the new credit, they let themselves loose again and follow a ‘shop till you drop’ routine. Almost immediately the credit limit of the new credit card is reached as well and they again default 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 techniques. They are quick to grab such credit card debt reduction techniques, but that’s not because they are serious about reducing their credit card debt but because of the alluring low APR offers.

As if it were booty, they again get back to building up their credit card debt. All the while they are spoiling their credit card status and they soon realise that no one is prepared to loan 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 involved with credit card debt. You cannot win, unless you die.

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