Credit Card Debts: Causes and Prevention

Financial illiteracy
Many people get their first credit card as soon as they are allowed to. They don't understand how money works and grows, how to save and invest for a rainy day, especially teenagers or sometimes even younger. The schools don't teach about it, parents also seldom ask you sit down and explained about it. Many teenagers treat credit cards as "free money" and buy anything that they want without showing any concern of how they are actually going to pay for it.
Prevention:
You are responsible for your life and your money anyway. Get educated and get in control. You will be surprised at how powerful you'll feel when you are making thoughtful decisions about where and when to spend your money.


Emergence of online shopping
Online shopping is become more friendly and convenient to the user. Whenever the users have possessed a credit card, they can just buy the things through online and treat credit card as a useful leaner wallet. This will result in overspending while surfing on those online shopping website. Furthermore, if you are involve in gambling websites. It can be addictive, hard to stop and loans are freely available by using credit card.
Prevention:
Do you really require such a high credit limit on your card? Know your limits and you will automatically spend less. Keep a running tally in writing of your weekly or monthly spending versus you budget, and update it before each purchase. This will help you to eliminate the risk that you overspend during the month.


Lifestyle maintenance
Expensive cars, luxury houses and etc are the big expense along the way. They treat credit card as money from windfall. Furthermore, spending tomorrow's money today is very tempting, especially if you believe that tomorrow will come no matter what. Therefore, people may then rely on credit card to get by.
Prevention:
It is important to communicate with your spouse or significant other and your children about finances. Keep the lines of communication open and discuss financial goals and spending styles. Spending less than you make is what's important.


Encouragement of credit card companies
Even the credit cards have encouraged you to spend money with no worries wherever you go, but the credit card companies have always sent the advertising to assaults you. Credit card companies often tell us that spend more earn more because of the rewards and privileges provided by them. These things are often hamper our ability to save our money.
Prevention:
Actually, spend more earn more doesn’t make sense because spend more sure lose more money that you have, right? Therefore, cut up your cards so that you are not tempted to use them. Save one card for emergencies. Lastly, remember to pay your credit card statement due on time.


Related links:
http://en.wikipedia.org/wiki/Credit_card
http://www.bankrate.com/brm/news/debt/debt_manage_2004/top-10-causes.asp
http://www.mozdex.com/prevent-credit-card-debt/
http://www.indiastudychannel.com/resources/53476-Credit-Card-Debt-Prevention.aspx