|
|
Excessive credit card debt
Excessive credit card debt
Most people advocate the case of credit cards, quoting the benefits and
convenience that arises from them. However, there is another
group/line-of-thought that strongly opposes credit cards. The reason being
‘Excessive Credit Card Debt’, which is one of the most serious problems faced by
the credit card holders and credit card industry. However, you can’t pull the
shutters on the credit card industry just because of a few irresponsible people
(or even if it’s more than few). That is not a solution for beating excessive
credit card debt. Moreover, you can’t overlook the benefits associated with the
credit cards.
The issue of excessive credit card debt can be looked at from 2 angles. First is
addressing of the excessive credit card debt problem at the industry level and
second is the addressing of the excessive credit card debt problem at the
individual’s level i.e. at the credit card holder level. The first method
involves increasing awareness of the excessive credit card debt problem to the
masses. This is more or less being done currently too. However, there should
also be an effort to tackle this problem of excessive credit card debt at an
even deeper level. This means trying to devise a mechanism to nip the problem
(of excessive credit card debt) in the bud. This mechanism should actually be a
part of the overall system. A lot of thought needs to go into devising such a
mechanism. Case studies should be taken up, statistics gathered and a proper
forum formed (with representatives from the credit card holders and from the
credit card suppliers). As of now, the credit card suppliers just seem to be
engaged in coming out with new products and getting customers enrolled to those
products. There is little attention paid towards addressing the problem of
excessive credit card debt in the real sense. Something like attending mandatory
seminars on the root causes of excessive credit card debt could be made part of
the credit card application process. Another way of dealing with the problem of
excessive credit card debt could be: developing a system for calculation of
applicable credit card limit at the individual level i.e. no
standard/product-based credit limits. Then there could be mechanisms for
proactively warning the users about excessive credit card debt (based on their
credit card usage) or even imposition of early restrictions on noticing the
first signs that lead to excessive credit card debt At the individual’s level,
the treatment of the problem of excessive credit card debt would include
following of best practices (on credit card usage and avoidance of excessive
credit card debt) by the individuals themselves. A checklist or a set of
questions could be provided to individuals for recognising the first signs of
excessive credit card debt.
So, the problem of excessive credit card debt can surely be dealt with by
putting together some serious thinking at a broader level together with
discipline at the individual’s level.
