Quatre E-Commerce World

Credit card the solution of shopping, it makes anyone who holds the card ease of purchasing any items in an instant. All customer have to do is take out the card, let the cashier slash it on the machine, sign, done. You can also use its serial number to shop on any of e-commerce sites on internet. But beware, there is never free of charge on having all the comfort on your side, moreover, if you’re using someone else money for that comfort.

So what is the danger of using credit card carelessly? First, we will briefly review of how credit card works. Credit card is a cash advance tool which let consumers to revolve their balance, at the cost of having interest charged. When a purchase is made, the cardholder will have to sign a receipt or entering personal identification number (PIN) to confirm the purchase. Once verified, purchase will be made and you’ll be put on debt to the bank or financial institution which issued the card, with interest. From year 2005 to May 2009, 1774 out of 3548 people declared bankrupt for credit card debt are under 30 years old, which is roughly 50%.

So, here are several causes of credit card debts:

1. Feeling of shopping for free

Unlike shopping with stack of cash in hand, which will make you feel guilty to hand those out at cashier, with credit card, all you need to know is how to slash the card and enjoy

2. Poor money management

Many of cards holder, doesn’t really realize the process behind paying with credit card. They don’t know where the money comes from and where their money is going, how much taxes and interest behind the payment, if there’s any administration fee for the credit card, and other things that might put them on debt. Slowly, but stacking high to turn customer’s business to bankruptcy.

3. Pay it forward

It is one of the most dangerous risks of using credit card. While you don’t have enough cash in saving, but you pay for something, the interest will keep increasing once you fail to pay back the debt in time, more and more as time goes by.

4. Urgent need of money

There’s no think twice of using credit card or getting any money you could use to pay for emergency issues such as medical expenses. In condition where a beloved family member in danger of life, you might used up big amount of credit card money without second consideration which leads cardholder to credit card debts.

5. Gambling

Another popular use of credit card which leads to debt is gambling. There is a smart method of buying gambling money using credit card. As addicting as the game is, without sufficient capital for it, credit card debt will haunt you severely more than the feeling of losing from it.

Even though it is listed of many scary causes of using credit card which leads to debt and bankruptcy; it is actually a very convenient and useful tool of having business transaction when the cardholder is being more careful and smart. There are ways to hold your credit card and step up the ladder of success.

1. Money management

The most essential of problem solving is started from one own self. There’s no blame to credit card issuer or credit card merchant when a credit card holder is the one to lead himself to debts. Plan your saving ahead, calculate your income and taxes, create budget of monthly expenses and extra expenses, and always save for emergency money.

2. Knowledge on credit card system

Study at least on what you have to spend for the credit card service. If there’s an annual fee, how high is the administration fee, cash advance fee, late payment fee, and any other finance charge. Keep them in mind before choosing a suitable credit card issuer and every time you use the credit card service.

3. Contacting and dealing with creditor

Communication is the way of peace and understanding. Address any credit card problems and wonders to creditor and ask for help whenever needed. There’s sometime a special finance solution for customer to pay off another debts or other needs. You might consult about fair debt collection practice act and propose modified payment plan.

4. Set a proper credit limit

Most of credit card can be put on usage limit to prevent cardholder from spending too much in a short time. Put credit card outcome limit as already stated on budget you planned.

5. Consider of using any alternative money solution

For example emergency and medical expenses might be better to be put on insurance for financial safety.

Take your time, be wise and think twice. By applying smart credit card solutions, your lifestyle and business may improve significantly. Spend to gain, not spend to lose.