Easy Credit Problem

One of the main elements in the problem of credit card debt is the easy access to credit. It’s an extremely profitable business for the people who provide credit cards and as a result of this their business practices with regard to approval processes both in terms of issuing cards and in terms of limits on spending can be very questionable at times.

A perfect example of this is the emphasis on the minimum payment. A lot of the credit card companies will go out of their way to encourage people to only pay the minimum. The reason for this is quite straightforward. They can profit on the existing balance to the tune of four or five times more than they would be able to garner from the same amount in a medium-term loan situation.

We live in a consumer driven culture and the combination of the fast pace of people’s lives, the easy access to this type of credit and the encouragement from the providers to only pay back a small proportion each month of what is owed, creates a dangerous cocktail where it’s very easy for people’s spending habits to get completely out of control.

If you find yourself in this situation, it’s extremely important to not be embarrassed by it. Perfectly intelligent and competent people fall into this trap every day of the week. It’s very easy to fall into this type of situation when you take your eye off the ball for even a short period of time.

That said, addressing the spending habits that got you into this situation the first place is an important part of the recovery process. Taking personal responsibility for your own finances is going to be an important part of fixing the problem. On the other hand, the point we’re trying to get across here is that the credit card companies are businesses. It’s very important to understand this as taking responsibility for the manner in which you deal with them is going to be very important for your financial future.