Credit card companies earn a huge amount of profit from interest. People like you and me are paying this interest to those companies. But we should realize the reason behind this interest payment. There are so many reasons behind this, among them 3 are most important. They are discussed below: 1) Payment of Medical expenses through credit cards: Recently it is found that most of the Americans are living their life without having Health Insurance. Companies which were providing Health Insurance for their employees, is no longer do. The net effect shows that people are having the problem of medical expenses. In this time credit card plays an important role to pay this payments.
2) Divorce is another important incident causing your debt. Actually when couple lives together the expenses like house rent, electricity bills and many other expenses combined into a single bill. When you get divorced, the expenses divide. But very likely your income remains the same. Ultimately what happens is that you end up in debt.
3) Living beyond your capability is the most common but avoidable reason of debt. Most of the people are in debt because of their spending attitude. I am not saying that don’t spend but you need to remember that if you spend beyond your means you will be in the hole of debt. Americans have a habit of spending, for this reason the graph of debt burden people is climbing up day by day. So try to maintain your spending.
Among these three the first two is unavoidable but the third one is very much avoidable. So make a proper plan of your expenses to avoid of being in debt.
