Title: Main Reasons People Get in Credit Card Debt | Pocketsense
Headings: Main Reasons People Get in Credit Card Debt
Main Reasons People Get in Credit Card Debt
No Budget
Misuse or Misunderstanding of Credit
Loss of Income
Emergencies and Unforeseen Expenses
Irresponsibility

Content: Misuse or Misunderstanding of Credit
If you don’t pay your bills of time or completely miss payments, you can trigger a sharp increase in your interest rates, generate penalties and lower your credit score, which can lead to higher interest rates or denial of credit in the future. For example, you miss a payment on a card with a no-interest balance transfer rate on which you have a $5,000 balance. Going from 0 percent interest to 22 percent interest on that balance, you’ll generate more than $1,000 in interest payments per year. 00:00
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Loss of Income
When people lose their jobs, they often have to run up or max out their cards. There may be no avoiding this for some people, but once you’re back on your feet, you’ll need to start attacking that debt, or the interest can keep you buried for years. This means that after you get a new job, you might need to forget about that attractive 401 (k) match your employer offers and use that money to reduce your card balances. Emergencies and Unforeseen Expenses
Medical bills, divorce, underemployment and gambling are four of the top 10 reasons for credit card debt, reports Steve Bucci on Bankrate.com. This is why many people create an emergency fund that helps them through times of unplanned financial stress. Purchasing a disability income insurance policy can help you keep cash coming in to pay your bills in the event you aren’t able to work. Irresponsibility
The reality of high credit card debt for many people is that they spent money they didn’t have and couldn’t pay back.