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Prominent Causes Of Credit Card And Personal Debt

Aug 17, 2007
People who have fallen into debts need to be very careful with regards to paying them off soon. If they do not manage their finances effectively the debts can go on accumulating until they become too much to handle. One of the most common debts is due to credit cards. Some of the common reasons people get into credit card or personal debts are as follows:

Divorce: Divorce not only hits people emotionally but also financially. A couple plan their lives and expenses with respect to their income. Their house, lifestyle, etc is based on their joint earnings. However, when they get divorced, there is a sudden need for two houses. Earlier, both were sharing the burden of paying the mortgage on one house, but now each will have to solely pay for individual houses. Also one partner may not be earning that well. This sudden increase in expenditure puts an enormous pressure on ones financial condition. There is a considerable increase in expenditure while the income remains stable. Thus resulting in heavy debt.

Medical Expenses: A recent trend seen in people is that they rarely have health insurance. Jobs which previously provided health insurance have also given up the policy. Jobs that yet offer the insurance make it difficult for the employees to avail of them. They may make it very difficult for the employees to accumulate enough working hours to be eligible for the insurance. Now, in the absence of such insurance, in times of health crisis, the employees are forced to pay with their own credit cards. Also generally, health problems may not permit the employee to work at that time. This situation coupled with the rising interest rates cause people to fall into debts.

Living extravagantly: People should effectively manage their finances. They should make a note of their expenses and sources of income. They should ensure that the income always exceed the expenditure. Only this will ensure a considerable saving that can then be used to pay off the debts or can be invested. For this people should keep a check on their expenses, the goods they buy and their lifestyle in general. They should avoid purchasing luxury items. They should stick to their budget and purchase only the items that are absolutely essential .

These are the three most prominent reasons leading people into debts. We should try to avoid them to live a debt free life.
About the Author
Jay Moncliff is the creator of http://calculatordebtdeals.debtrelief2000.info ; a website specialized on debt relief , resources and articles. More info on debt relief , debt settlement at: debt settlement .
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