subject: 5 Habits that Lead to Credit Card Debt [print this page] 5 Habits that Lead to Credit Card Debt 5 Habits that Lead to Credit Card Debt
Credit card debt doesn't just occur overnight. It's a fairly long process. While unforeseeable circumstances can change the fortunes of an individual overnight plunging him deep into debt, traditionally it is the result of carelessness and lack of attention to one's finances and expenses.
Here we will analyze five habits in no particular order of importance that lead to credit card debt. By eliminating these habits, a person can successfully safeguard themselves from falling into debt.
1. Signing Up for Multiple Credit Cards
People make this mistake a lot, completely oblivious to its long term implications. Signing up for multiple cards is essentially the first step towards descending into the depths of debt and a very convenient one at that. An individual with multiple cards opts to max them out as the first step when the expenses start exceeding his or her income. In the end they are left with frustration and regret as the bills start piling up.
2. Skipping Payments Leads To Credit Card Debt
This is a very common and very careless habit that almost always lands consumers in hot water. Skipping payments with the intention of making it up next month is a flawed logic based on poor reasoning. Skipping one month only encourages people to skip the next month at the cost of a small late fee. What they do not realize until it's too late is that these late fees can quickly add up and becoming a huge credit card debt at the end.
3. Excessive Use of Credit Cards
One thing people tend to forget is that the credit limit on the cards is not the money that belongs to them. It's more like a temporary loan that they have to pay back over time. People get careless and keep swiping the plastic over and over till it maxes out. They end up being completely overwhelmed by the amount they owe to numerous vendors and are left with a pile of bills they simply can't pay.
4. Spending Exceeds Income
Another bad habit that is hard to control and even more difficult to spot is people failing to realize that their overall spending far exceeds their total income. This approach slowly eats away the savings. Carelessness and lack of checks and balances of household expenses are the main reasons consumers fail to realize this mistake until it is too late.
5. Careless Shopping
We have already established that careless financial planning can lead to debt. Careless shopping is one example of careless financial planning. Consumers should practice smart shopping techniques when making purchases. A good practice is to shop around and compare prices instead of buying goods from the very first shop they step into. Comparing prices will help them save money in the long run and avoid them being burdened by hefty expenses.
No one wants to plunge into credit card debt on purpose. It's the small careless mistakes and bad habits that lead to such misfortune. Even though there are programs available to help people with paying credit card debt, it is always best to incorporate a few changes into their spending habits and simply avoiding the problem altogether.
