Credit Card – A Silent Killer

 A credit card is a plastic card which is used to make payments for the things that we purchase. These purchases can be done either in online mode or offline mode but this card is completely different from debit card. A debit card is also used for making payments but it works on another principle. It uses the money of our savings bank account and whenever we make any payments, the entire transaction is reflected on the bank account statement. Unlike debit card, credit card holders are given a credit limit. This credit limit is the total amount the user gets to spend. The limit is fixed depending on the credit worthiness of the card holder. The details of the transactions are shown in the statement along with the minimum amount which is to be paid by the user within the time stipulated.

Hypnotism by Credit Cards

Credit card debt refers to unsecured debt of the consumers which arises from using of these cards. There are people who spend more money in comparison to their income. They are often blamed to be living beyond their capacity. Although credit cards make consumerism easy without thinking, yet this is the cause for debt accumulation. When there is low budget for the consumers in course of shopping or for incurring any other expenses, the credit card incite them to spend a little bit more amount. Various researches show that people have a habit of spending more money with the plastic card than by absolute terms. In fact they pay double for the same item when they use the credit card. People become a prey of temptation and they think that they can get unlimited access to all that they can buy. This is one of the major reasons for bankruptcy.

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Mouse-trap for the young users and way out

Users fall into the trap without their proper knowledge about the card. Its only when they start sinking in the debts, they realize about the effects of credit card. In most of the cases banks play a crucial role in the credit debt of the consumers. This scheme begins with the lucrative offers from the agency. It may be in the form of low rate of interest, high credit limit, no annual fees and even rewards like cash bonuses and free trip to exotic locations. These eye catching offers trap the innocent minds of college graduates and high school students who have no knowledge regarding these. Gradually financial disaster crops up in the life of the young ones who are not matured enough to take a wise decision. Although some people try to solve the situation by making the minimum payments to the agency yet sometimes they even miss payment. The novice brains try to overcome the hurdle by taking loans at a subsidized rate, some by taking new credit card having high limit and low rate of interest in order clear all the debts. It ends up with bill collectors visiting the house or bringing the case before the court of law.