Excessive Credit Card Debt
Most people advocate the case of credit cards, quoting the benefits and convenience that arises from them.
However, there is another group/line-of-thought that strongly opposes credit cards. The reason being
‘Excessive Credit Card Debt’, which is one of the most serious problems faced by the credit card
holders and credit card industry. However, you can’t pull the shutters on the credit card industry just because of
a few irresponsible people (or even if it’s more than few). That is not a solution for beating excessive credit
card debt. Moreover, you can’t overlook the benefits associated with the credit cards.
The issue of excessive credit card debt can be looked at from 2 angles. First is addressing of the excessive
credit card debt problem at the industry level and second is the addressing of the excessive credit card debt
problem at the individual’s level i.e. at the credit card holder level. The first method involves increasing
awareness of the excessive credit card debt problem to the masses. This is more or less being done currently too.
However, there should also be an effort to tackle this problem of excessive credit card debt at an even deeper
level. This means trying to devise a mechanism to nip the problem (of excessive credit card debt) in the bud. This
mechanism should actually be a part of the overall system. A lot of thought needs to go into devising such a
mechanism. Case studies should be taken up, statistics gathered and a proper forum formed (with representatives
from the credit card holders and from the credit card suppliers). As of now, the credit card suppliers just seem to
be engaged in coming out with new products and getting customers enrolled to those products. There is little
attention paid towards addressing the problem of excessive credit card debt in the real sense. Something like
attending mandatory seminars on the root causes of excessive credit card debt could be made part of the credit card
application process. Another way of dealing with the problem of excessive credit card debt could be: developing a
system for calculation of applicable credit card limit at the individual level i.e. no standard/product-based
credit limits. Then there could be mechanisms for proactively warning the users about excessive credit card debt
(based on their credit card usage) or even imposition of early restrictions on noticing the first signs that lead
to excessive credit card debt At the individual’s level, the treatment of the problem of excessive credit card debt
would include following of best practices (on credit card usage and avoidance of excessive credit card debt) by the
individuals themselves. A checklist or a set of questions could be provided to individuals for recognising the
first signs of excessive credit card debt.
So, the problem of excessive credit card debt can surely be dealt with by putting together some
serious thinking at a broader level together with discipline at the individual’s level.
Credit in Minutes Tip #1
Stay on top of your credit report. Most credit reports contain errors. Make sure you check your credit report
every year (you get one free credit report every twelve months) and if there are errors make sure to challenge them
with the reporting credit agency. Credit agencies are required to investigate each and every challenge that gets
Credit in Minutes Tip
Just because you qualify for all of those credit cards does not mean you should get them. A person with too many
credit cards looks sketchy in the eyes of a potential creditor. Think of it this way: if a person is financially
stable does he or she need ten different credit cards? Wouldn’t just one or two suffice?
Credit in Minutes Tip
The best way to raise your credit score is to make all of your payments on time. It sounds too simple to be
true, but that’s all there really is to it. Staying out of debt and/or making all of your debt payments on time
will keep your score up where it should be.