The Credit Card Trap

The credit card trap is one of the easiest financial traps for anyone to fall in to in modern day society. The relevant ease with which credit cards are available, the wide variety of places in which they are accepted and the difficulty on occasion of monitoring how much we have actually spent on them can all contribute to the credit card trap bringing financial hardship and misery in the long term.

Particularly for those unused to working with credit cards, the temptations when the card is received in the first instance will be enormous. A card and PIN will be received, together with a notification of the spending limit or credit limit attached to the card, and it is all too easy for the unwary to essentially view this amount of money as money in the bank.

When one starts off using a credit card in the first instance, it is likely that one will be aware that the money is something which will have to be paid back but the temptations can often be too great to resist. Perhaps for the first time in their life, the person will have the financial ability to purchase items or attend events which were previously beyond the capability of their spending. Each purchase will be thought of as being, “Only for xyz amount,” and the way in which the credit card debt is creeping up may not be recognised in the short term.

When the credit card statement is received the following month, the unwary spender may be in for a shock. It may well be that it is only at this stage that they realise how much they have spent on the card and see how much even their minimum monthly repayment is. It could be that even this minimum monthly repayment is beyond their means and in an extreme circumstance, they may be required to take a cash advance on the credit card in order to make the payment.

It is not therefore difficult to see how the credit card trap can close around anyone in such circumstances. It only takes a very short time to spend beyond one’s means on a credit card and essentially get in to unmanageable debt. This is only likely to spiral if urgent action is not taken and as the credit card debt mounts, so to will the problems. A second credit card may even result as the spending limit on the first one draws inexorably closer.

Anyone who recognises themselves as falling in to the credit card trap in this way, therefore, should take urgent and positive action. They should obtain advice from wherever they can, perhaps even consider taking a consolidation loan from their bank as a means of clearing the credit card debt at a much lower rate of interest and via a manageable monthly repayment. The longer the credit card trap problem goes unaddressed, the more serious it is likely to become.