Credit Card Debt Problem! Credit cards are no longer a luxury, they're almost a necessity. So you'd imagine a lot of people going for credit cards. In fact, many people have more than one credit card. The credit card industry is thus growing by leaps and bounds.

Problem For Credit Card Debt

Credit cards are no longer a luxury, they're almost a necessity. So you'd imagine a lot of people going for credit cards. In fact, many people have more than one credit card. The credit card industry is thus growing by leaps and bounds. The credit card industry and credit card holders, however, have a major problem called' credit card debt.' To understand what credit card debt actually means, we need to understand the workflow associated with the use of credit cards as such.

Credit cards, as the name suggests, are cards on which you can obtain credit, i.e. borrow (your credit card debt). Your credit card is a representative of the credit account you hold with the credit card provider. In fact, your loans that contribute to your credit card debt are whatever payments you make. Your total credit card debt is the total amount you owe to the credit card provider. You must pay your credit card debt on a monthly basis.

So, you receive a monthly statement or your credit card bill that shows your total credit card debt. You must pay off your credit card debt by the due date of payment, failing which you incur late fees and interest charges. However, you also have the option of making a partial (minimum) payment, in which case you do not incur a late fee but only interest charges on your credit card debt. If you do not fully pay off your credit card debt, interest charges will also be added to it.

Therefore, your credit card debt continues to rise, especially as credit card debt interest rates are usually higher than other types of credit / bill rates. In addition, every month, the interest charge adds the new balance or credit card debt to your credit card debt level. If you continue to make partial payments (or no payments), interest charges on the new credit card debt are calculated. You end up paying interest on interest last month, too.

Thus, your credit card debt accumulates quickly and soon you will find that what was once a relatively small credit card debt has flown into a large amount, which you find almost impossible to pay. Moreover, if you still do not control your spending habits, your credit card debt will rise even faster. That's how the vicious credit card debt circle works. 
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