Credit card debt is accumulated via the interest charged and penalties when the customer does not make payment to the credit card company. There are many causes for the credit card debt, such as:
≈ Spend expenses more than income.
- Due to the attractive advertisement published, people are hardly to control themselves from spending. During economic downturn, unemployment rate is increasing, this will be a huge impact to the household as they are forced to use their credit card for groceries and other utilities.
≈ Lack of finance management plan
- Educations like saving or investing personal finances should be taught in school since it is important for everyone to know that having enough savings for a rainy day is always a worthwhile investment.
≈ Hold too many credit card
- Many people believe that having more credit cards in the wallet is an essential sign of prosperity.
≈ Attraction from credit card companies
- Credit card companies have encouraged customer to spend more money by giving them rewards or privileges.
Tips to take those crucial steps to financial freedom:
√ Reduce spending.
- If the credit card that you holding is charging a high interest, transfer the balance to ones with a lower annual percentage rate.
√ Increase your income
- If your current salary is not enough to cover the payments on your debt, get a second job. Even a few hours a week can make a huge difference.
√ Debt counseling.
- Go through a counseling session with financial experts before you choose to go for any particular kind of credit card debt service.