Credit Card Debt
Credit cards have been considered to be a luxury in the past but have in recent times become more of a necessity for people around the world. People nowadays depend on credit card more than before and almost all of them possess one credit card for sure.
With the increasing popularity of credit cards among the people a new problem in the form of credit card debt has surfaced, which proves to be quite problematic not only for those who use the credit cards, but also to those who issue them. A better understanding about the functionality of a credit card helps to understand credit card debt in a much better manner.
Credit cards, as the name suggests, are cards on which you can get credit i.e. it allows you to borrow money in order to make a purchase. Your credit card is a representative of the credit account that you hold with the credit card supplier. Whatever payments you make to others using your credit cards actually represent your borrowing against that line of credit extended to you by the bank. Those charges create your credit card debt.
The total amount that is owed by a credit card holder to the credit card supplier adds up to be the total credit card debt, and needs to be paid back every month. Due to this the credit card suppliers issue monthly statements to the credit card holders and they are expected to pay back their dues within a particular date. Any delay in payment would result in the person having to pay extra money in terms of late fee and interest charges.
Credit card holders are given an option of paying back a partial sum every month for clearing their credit card debt. This helps them to avoid paying the late fee, but increase the interest charges that in turn add up to the credit card debt. Due to the higher rates of interest on credit card debt, the amount of credit card debt keeps on increasing with time.
The credit card debt that is formed each month not only includes the outstanding amount that you need to pay, the interest that has been charged on it, but also includes the interest that is calculated on the previous month's interest paid. Thus with the more delay that you make in clearing your credit card debt, you only make matters worse by increasing your credit card debt.
You will soon find that the credit card debt has become a much larger amount than what it actually had been before. The amount may become so large that you may find it impossible to pay back. The only way you can help yourself is by curbing your spending so that you do not have a very large credit card debt. - 23212
With the increasing popularity of credit cards among the people a new problem in the form of credit card debt has surfaced, which proves to be quite problematic not only for those who use the credit cards, but also to those who issue them. A better understanding about the functionality of a credit card helps to understand credit card debt in a much better manner.
Credit cards, as the name suggests, are cards on which you can get credit i.e. it allows you to borrow money in order to make a purchase. Your credit card is a representative of the credit account that you hold with the credit card supplier. Whatever payments you make to others using your credit cards actually represent your borrowing against that line of credit extended to you by the bank. Those charges create your credit card debt.
The total amount that is owed by a credit card holder to the credit card supplier adds up to be the total credit card debt, and needs to be paid back every month. Due to this the credit card suppliers issue monthly statements to the credit card holders and they are expected to pay back their dues within a particular date. Any delay in payment would result in the person having to pay extra money in terms of late fee and interest charges.
Credit card holders are given an option of paying back a partial sum every month for clearing their credit card debt. This helps them to avoid paying the late fee, but increase the interest charges that in turn add up to the credit card debt. Due to the higher rates of interest on credit card debt, the amount of credit card debt keeps on increasing with time.
The credit card debt that is formed each month not only includes the outstanding amount that you need to pay, the interest that has been charged on it, but also includes the interest that is calculated on the previous month's interest paid. Thus with the more delay that you make in clearing your credit card debt, you only make matters worse by increasing your credit card debt.
You will soon find that the credit card debt has become a much larger amount than what it actually had been before. The amount may become so large that you may find it impossible to pay back. The only way you can help yourself is by curbing your spending so that you do not have a very large credit card debt. - 23212
About the Author:
Are you a credit card user and willing to know how exactly the credit card works? Then here is a website http://www.weknowthewayback.com from Don Burnham which explains you everything about Credit Cards.
posted by X - Men @ 4:14 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home