Can I swipe using your credit card?

This is one of those common statements when one wants to use a credit card instead of cash.

But have you ever wondered why?

Why does a person really have that tendency to willingly splurge even if he/she only has less than what he/she could spend? Why does a person spend a lot for all the things he/she wants more than what he/she needs? Do you think it is but part of human nature to spend even if he/she has no more means to pay? Do you ever wonder why these happen?


Here are just some of the reasons why individuals fall into debt: One is, there is what you call as deficit spending. A deficit happens when spending exceeds income. This occurs when a person is either aware or unaware that he/ she spends too much more than what he/ she earns. The consequence of this is borrowing due to lack of funds. If you accumulate deficit, this will then become debt. And as we all know, debt is an obligation that we must pay in a future time. This will hinder us to spend freely in the future. It is also known that the thing that you could buy in the future are all sacrificed since at the present, you are still paying for the debts you currently owe. Just a tip, just spend below your means to avoid this from happening. Another is, a person falls into debt by personal choice. Take for instance, buying unnecessary stuff with money that you do not have is a decision you made on your own. This means that you are acquiring by credit. Or this could also mean making a bad investment. One should know how to live below his/her means. Be extra careful when making financial decisions. See what will be the consequences when making these big leaps in the financial world. Third one is simple. This may be brought about by ignorance. A person may take a decision of having a credit card without even knowing the terms of payment or how much he/she is paying for the interests. Thus, this may result to the piling up of large interest amounts of the credit card. To counter this, a person must first educate his/herself first before applying for a credit card.

So basically, how do we solve these then? Know what? One must know how to live the basic way. As the cliché goes, sometimes all we need to do is to do everything back to the basic. Shred out those extras that we don’t need and start living a simple life. We must also know our limits and we must also acknowledge the fact that there will come a time and if we don’t take precautions, our expenses will go beyond what we are earning. Ignorance of this will then lead us to deficit spending. If we have the right knowledge, willpower and discipline within ourselves, we will for sure overcome a life free from piles of debts. Be stress fee, be debt free.

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