Tuesday, February 10, 2009

Causes and Preventions of Credit Card Debts

Most of the time, we cannot endure the temptation of the convenience that credit cards provide. The credit card companies always do not want us to pay off the credit card debts, why they do so? The reason is just the interest is the lifeblood of the company, the more credit card debt we have, the more interest we must pay. We always forget the budget to spend when we making payment by using credit card.
The fastest way we get into credit difficulties is by not repaying the minimum payment required; we called this as missing payments. This will result in the card being refused at retailers until the payment is made. We can set up a Direct Debit for the minimum amount and pay off as much of the remaining balance as possible to keep the debt low. Normally, spending on credit card is borrowing money that is a debt that must be repaid at some point. The smart card holders will only spend on what they can afford and won’t overspend.
Another thing may cause credit card debt is holding a fistful of cards. It is because the more cards we hold, it may cause us to spend more and more and may be overspending. So, we might never hold more than eight cards at any one time, as this will adversely affect the credit ratings. We should clear any outstanding balances and cancel the cards that are no longer used. It can also reduce the risk that our cards be stolen.
There are some tips to help us to prevent credit card debts:
• Never heavy rely on credit card. When you can, remember always use cash to make payment, no credit, no debt.
• Move debts to the lowest interest rate available. Remember, a card holder with a good credit rating can always ring and ask the credit card company for a lower rate at any time.
• Pay your debt on time. Remember, you must pay your bill on time, don’t let them have the chance to charge you interest in late payment.
• Negotiate with the credit card companies. Sometimes, if you pay the credit card debt late only one or two days, can always try to negotiate to the company for postpone the payment by not charging interest.

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