You’ve dug yourself into a hole with credit card debt and wonder what’s next. Digging out of debt is important, but first you may have to dig deeper for understanding psychological factors leading to credit card debt.
Devil in the details: discover what you’re buying, where and why you’re using credit
Financial anthropologist and money coach Denise Hughes identifies factors contributing to problems involving credit card debt:
Having a different “money-style” than your spouse or partner: Using credit cards for funding purchases you want to keep secret, or revenge shopping when you’ve had a domestic spat are examples of how conflicts over money can create credit card debt.
Compulsive shopping: Rewarding yourself with a plastic-funded shopping spree after a bad day at work may seem therapeutic, but it can lead to family problems, divorce and bankruptcy.
Entitlement and deserving: Do you treat yourself because you “deserve it”? Do you over-spend when you’re angry, depressed or lonely?
Making purchases using revolving credit: Buying things that you cannot pay for within one billing cycle causes credit card debt to increase and can lead to penalty fees and lower credit scores.
Using credit cards in place of meeting deep-seated psychological needs such as feeling loved and appreciated, having fun, having an influence over your own life, and enjoying personal freedom can lead to financial problems.
Attempting to replace vital emotional needs with over-spending using credit cards suggests that you’re attempting to fill a vacancy in your life by buying things. Consulting with a financial advisor or consumer debt counseling service can help with improving your finances and quality of life.
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.