I’m not going to write a post on why or how people got into debt. But having spoken to some people who carry credit card debt, here are some of the reasons people get into credit card debt and the type of expenses that got them to where they are.

1. Job Loss - Job loss was one of the reasons folks get into credit card debt. From the people that I spoke to, this normally came about after using up their emergency fund.

2. Medical Expenses - yes, sad as it may be, I know of a couple of folks with no medical insurance and had to charge their bills to their credit cards. Now, to be honest, the bill was probably lower for someone with no insurance!

3. Daughters Wedding - We all talk about saving for your kids college education. Nobody talks about their daughter’s wedding! And they do cost quite a bit (depends on the wedding obviously). But someone I know carried a balance because of this.

4. Start a business - Yes, many people do max out credit cards when they start a business. Guess the most important thing is to make sure you succeed in your business lest you be stuck with tons of credit card debt!

5. Buying Stuff on the Internet and QVC - Yes, there is true. But I guess they are people who are always buying stuff they do not need. And because there is a GREAT DEAL!

6. Taking Advantage of 0% Teaser Deals - Well, how can you resist it when it is 0% for 12 months! I guess that as long as you really have the ability to pay it back, then it is OK.

7. Buying Furniture - Yes, when we fulfill the American Dream of owning a house, it actually comes with increase expenses. We need to fill it with furniture. Hence, the expenses pile up and they go to the good old credit card.

8. Clothes, Shoes and Jewelery - Girls stuff I guess. But I guess that I would classify this as uncontrolled spending.

9. Tech Gadgets - Guys stuff. But a couple of guys told me that they got into carrying a balance when they started to put their Apple iMac on the credit card and other gadgets. I guess the people who got into this situation are “innovators”, always buying the latest stuff.

Well, this is what I got from my friends who have credit card debt and may not be representative of the average person with credit card debt. If you happen to carry a balance, I would love to hear the reason and the expenditure that got you here!

This entry was posted on Friday, May 2nd, 2008 at 4:27 am and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.