Credit Card Debt : causes and prevention

Credit Card Debt is the unpaid balance on the credit card. This is not the minimum amount due, but is the total balance due on a respective line of credit.
Nowadays, credit card debts are major cause of bankruptcies each year. It is because many people have never realized of its consequences from financial and non financial perspectives when get a new credit card or not enough safety net when there is an incident happen.

There are several causes of credit card debts:

i) Financial Ignorance
Most of them do not have attend any financial training. It's on you to learn to save for a rainy day, as well as manage your money so you can own a house over the longer term.

ii) Poor money management
They do not having a monthly spending plan and not keeping track of your monthly bills makes you unaware of where your money is going.

iii) Less Income, More Expenses
This happens when monthly expenses are not cut down in line with the reduction in income. This obviously leads to a rise in debt. The family is forced to use their credit cards.

iv) Saving little or not at all
This happens when people do not saving their money or saving too little.



Here are some things to help you with debt prevention and management:

i) Budget
A budget allows you the freedom of having peace of mind knowing that all of your bills are paid and the money has been allocated ahead of time for these expenses.

ii) Savings plan
It may help you prevent yourself from getting into debt. Set aside a certain amount each month into a savings account. Saving with a goal in mind motivates many people to stick to their savings plan.

iii) Consolidate your debt into one payment using an unsecured loan
Although the rates will be higher than a secured loan, often it will be lower than your credit card rates and the payment will be lower as well. This will allow you to pay off your debt in a specified time period while paying less interest over the long run.


References:
http://en.wikipedia.org/wiki/Credit_card
http://www.creditcards.com/