Credit card debt can cause financial problems for years -- even a lifetime -- making it difficult to save for retirement or pay cash for simple emergencies. In extreme cases, credit card debt can lead to bankruptcy in the event of a job loss or illness.
How does credit card debt accumulate?
Credit cards allow you to pay for goods and services without using cash. Most cards allow you to pay the balance in full each month, or make a minimum payment that could be as low as 1 percent of the balance, according to "The New York Times." Paying less than the full balance each month leads to the accumulation of debt.
Why pay more than the minimum payment each month?
It can take decades to pay off credit card debt if you're only able to make the minimum payment. "The New York Times" reported in 2009 that it would take 32 years to pay off a $10,000 credit card balance at 18 percent interest if you only made the minimum payment.
How can I avoid credit card debt?
Avoid excessive credit card debt by paying more than the minimum payment each month. The website MyFICO reported in 2010 that more than half the people with credit cards, on average, use less than 30 percent of their available credit. Avoid excessive debt by keeping your balances low as well.
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