| The debt situation in USA is | | | | credit cards each month, a debt of $5000 |
| particularly grim. According to a study | | | | will take you more than 30 years to |
| an average American owes about $10,000 | | | | repay and in this process you will have |
| in debt and that too at a whopping 14% | | | | paid the credit card an interest of more |
| interest rate. What are the most | | | | than $5000. And if your credit card debt |
| important things that lead a person to | | | | is $10,000 and you just pay the monthly |
| credit card debt? In this article we | | | | minimum chances are good that you will |
| analyse few of them. | | | | never be able to repay your debt in a |
| 1. Overborrowing | | | | lifetime. |
| Credit cards provide a very easy way to | | | | 3. Multiple credit cards and repayment |
| borrow money. Just a swipe and you are | | | | defaults |
| done. This ease drives impulsive buying | | | | Average American household carries |
| and without any forethought a credit | | | | around 5 credit cards, which is more |
| card holder goes on and on making | | | | than their regular needs. What happens |
| purchases with his credit card, he | | | | is that with multiple credit cards they |
| doesn't ever worry that this credit card | | | | falter on repayments and are slapped |
| money is a debt and has to be repaid | | | | with a late payment fees, high interest |
| with interest. | | | | rates and negative remarks on their |
| 2. Paying just the monthly minimum | | | | credit history. This makes getting |
| Every credit card statement comes with a | | | | further credit very costly. To make the |
| minimum payment amount mentioned in it. | | | | matter worse, some people get new credit |
| This is generally a percentage of the | | | | cards at exorbitant interest rates to |
| outstanding balance on the credit card | | | | repay their existing credit card debt, |
| subject to certain conditions. This is | | | | and are seriously caught in the debt |
| the minimum amount to be paid to the | | | | trap. |
| credit card company every month. The sad | | | | Credit card debt is growing at an |
| part is that people take it as the only | | | | alarming rate, the situation at the |
| thing to be done and continue with just | | | | savings front is very grim and a crisis |
| the monthly minimum. If you are just | | | | like the great depression is looming on |
| paying the monthly minimums on your | | | | American society. |