Credit card debt is a huge burden for millions of Americans today. It is estimated the average household credit card debt in the United States is over ten thousand dollars.
There are few things that cause more grief and anxiety that owing more money than you have. By using some simple techniques of risk management, taken from business, you can easily avoid going into credit card debt. If you'd like to stay out of debt and keep your head above water financially, then this article is for you.
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The primary step is when you are about to make a decision. Since we're talking about credit card debt, this is when you are considering buying something on credit.
This step entails stopping a moment, and considering all the risks involved, specifically the worst thing that can happen. By stopping just for a few moments before you make any purchasing decisions, you cans save yourself a lot of headaches down the road.
In the case of buying something on credit, what is the worst possible thing that can happen? For many people, it's buying the item, then receiving the bill a few weeks later, only to find there isn't enough money to pay it off. So you make the minimum payment. The same thing happens month after month. Eventually you wind up paying three or four times the original price of the item.
After you've determined the worst possible outcome, next you've got to determine how likely it is to happen. A great way to do this is to look at your recent payment history. If you usually pay off all or most of your balance every month, then you've got nothing to worry about. But if you usually struggle to just make the minimum payment, then you will likely do so in a few weeks when the bill comes due.