Updated: Apr 27, 2023

10 Reasons Why You Are Drowning in Credit Card Debt

If you are somebody who is being overwhelmed by a mountain of credit card debt, here’s the “good” news. You are not alone, there are plenty of others who are drowning in card debt and wondering, how did it all happen?
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If you are somebody who is being overwhelmed by a mountain of credit card debt, here’s the “good” news.

You are not alone, there are plenty of others who are drowning in card debt and wondering, how did it all happen?

I am surprised to find many people, who are facing mounting credit card debt, aren’t really aware of the reasons that led to this debt.

All these reasons come under one umbrella called "bad decisions." You make a bad credit decision and you incur debt. It’s as simple as that.

So, let’s take a look at the reasons:

1. Spending more than you are earning

The credit limit on your credit card might me way more than the income you are taking home each month, but that doesn’t mean you should start living beyond your means.

Say you are earning $2,000 per month and your monthly spending, including your credit card purchases total $2,500 -- that $500 is debt.

Why would you want to rake up monthly expenses that are way more than you are actually earning?

This simply doesn’t make sense, and if you keep doing it, you will end up with enormous debt.

2. Unplanned Purchases

You are walking down the aisle of the department store towards the billing counter and you suddenly see a deal for Haagen-Dazs ice cream (you already bought ice cream).

You make a detour and put a bunch of your favorite in your cart (you can’t stop at one).

This is your problem; juxtapose this example on all your shopping expeditions and you will understand what I am talking about.

You just can’t stop yourself from making unplanned purchases. This shoots up your credit card bill.

3. Not Working Within a Budget

You might be one of those people who use their credit cards for all their purchases. Perhaps you're big on reaping credit card rewards.

Don’t worry, that’s not a problem. The problem is that you haven’t earmarked a budget for you purchases. So, you don’t really know how much you have spent with your card.

You need to keep track of your credit card spending and make sure that it sticks to a predetermined budget. If you know you have reached your budget for the month, stop using your card.

4. Making a Major Purchase with your Credit Card

Buying Haagen-Dazs ice cream with you credit card? I get that! But buying a car with your card, or at least making partial payments by card?

That’s something I don’t get. Until you are on very sure footing about your credit, you shouldn’t make any major purchases.

If you aren’t sure where the money is going to come from don’t make such decisions.

5. Getting Sucked Into Promotions

I personally am a sucker for promotions. Thankfully, better sense prevails at the right time.

Credit card companies know how to promote their cards with offers of rewards and zero percent interest until you are convinced using a particular card is a good idea for you.

It might also induce you to make major purchases with the card. But remember, you still have to pay for that purchase.

Debt is incurred when you don’t have the capacity to pay, but you still choose to buy a particular product.

6. You have too many cards

The rule is simple: if you have more than one card, you need to keep more control over your credit card spending.

Will you be able to do this? A number of people cannot.

7. Not reading the fine print

What is the first thing you did when you got your credit card in the mail? Did you read the fine print? If not, that's a big mistake!

Remember the "promotion" I mentioned earlier? Well, do you know when your “zero percent interest” promotional offer ends?

Do you know about your balance transfer fees, late payment charges? Not reading the fine print is a criminal error.

That could also be one of the reasons for your debt.

8. You buy things you don’t need

I sometimes notice people buying a lot of things they don’t need just because they feel empowered with their cards.

They buy two of something, when one is more than enough. This is a recipe for bad credit card debt.

9. Have you been making minimum payments?

If you have chosen to make minimum payments to pay your bills, you are going to keep adding on to your debt.

There will be no end to it. And what’s more, you will have to pay interest on that entire amount. It’s not a pretty situation to be in.

10. You don’t know how to use a credit card

That’s putting in a nutshell, isn’t it? A credit card is for your convenience and is not your supplemental income. And yes, you need to pay your credit card bills.

If you don’t know or have the wrong idea about the use of a credit card, don’t use it. You won’t be missing out on anything.

If you’ve been using your credit card as a single entry pass to all the good things in life, you are going to incur heavy debts. And you will have nobody to blame but yourself.

Take a close hard look at these ten reasons and check whether you are guilty of doing any of them. Once you identify the reasons for your credit card debt, start taking corrective action, pronto!

Gianna Clark is associated with WomenSavings, a website that gives advice to women who want help on how to budget money. She loves helping people work out a budget that ensures they save money. She has helped plenty of people get the most out of their lives for less. In her spare time, she loves do a bit of gardening.