Credit cards and Debt
Credit cards and debt are not any more a luxury, they’re almost a necessity. So, you’d imagine tons of individuals going for credit cards. In fact, tons of individuals possess quite one credit card. So, the Credit card industry is growing by leaps and bounds. However, the Credit cards and debt industry and Credit cardholders are posed with an enormous problem called ‘Credit Card Debt’. so as to know what ‘credit card debt’ actually means, we’d like to know the workflow related to the utilization of credit cards intrinsically.
Credit cards and debt, because the name suggests, are cards on which you’ll get credit i.e. make borrowings (your Credit cards and debt). Your Credit card may be a representative of the charge account that you simply hold with the Credit card supplier. Whatever payments you create using your Credit cards are literally your borrowings that contribute towards your Credit card debt. Your total debt is that the total amount you owe the Credit card supplier. you want to settle your Credit card debt on a monthly basis. So, you receive a monthly statement or your Visa, Mastercard, and/or American Express bill which shows your total debt.
You want to pay off your Credit cards
You want to pay off your Credit cards and debt by the payment maturity failing which you’ll incur a late fee and interest charges. However, you’ve got the choice of creating a partial (minimum) payment too, during which case you don’t incur a late fee but just the interest charges on your Credit cards debt. If you don’t pay off your Credit cards and debt fully, the interest charges too get added thereto. So your Credit card debt keeps on increasing, more so because the interest rates on Credit cards are generally above the interest rates on other quiet loans/borrowings. Further, the interest charges add on to your Credit cards debt monthly to make a new balance or the new Credit cards and debt amount.
If you continue making partial payments
If you continue making partial payments (or no payments) the interest charges are calculated afresh on the new debt. So you finish up paying interest on the last month’s interest too. Thus your Credit card debt accumulates rapidly and shortly you discover that what was once a comparatively small debt has ballooned into an enormous amount that you discover almost impossible to pay.