The Threat of Debt Spiral

The Threat of Debt Spiral

The difficulty with credit card practice arises when people twitch assuming that they can pay for the purchases later on. The additional disposable cash leads to a incorrect sense of financial security particularly in these times of disrupted cash flow and income losses.
Eventually, if you are unable to pay the bills in full and roll the outstanding amount into the next cycle, credit card interest rate will be applicable and it can go as high as 42% per annum. If you continue to revolve your balances by paying just the minimum amount due, a debt spiral will soon start.

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