Causes And Prevention Of Credit Card Debts

Do you have credit card debt? Will you feel stress when you live in a debt? AND … How can you live in stress free life and not bankruptcies? Here are the some causes that you faced in debt and some of the methods help you to prevent credit card debt.




CAUSES
1) Poor Money Management
If you have no plan for monthly spending and didn’t pay your bills monthly, you wouldn’t know where your money is going. Maybe you will spend RM800 every month, but you do not realize it.

2) Lower salary, higher expenses
If parents have such situation and lose his/her job, debt arises obviously.

3)Underemployment
Are you underemployed? If yes, this means that your salary is not enough to cover your expenses. So, you need to cut down on your lifestyle. Forget about shopping at Pavilion every weekend if you only work for RM 800 per month. However, if you have salary RM5000 per month, then you can think about the luxury brand- LOUIS VUITTON.

4) Credit cards as a “crutch”
Many people use credit cards as a “crutch”. They will buy the things they desired notwithstanding they cannot really afford it. Then the accumulate amount of principle and interest is terrible.

PREVENTION

• Control your limit to avoid from using credit card.

• Well planned financial management to guide you become an organized consumer.
• Always pay on time to enjoy lower interest rates because this is the crucial factor that manages your payment schedule.
• Credit card should be use only when emergency happens, unless you plan in paying the entire balance off immediately.
  
• Spend less to avoid credit card debts.

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The Application Of Pre-Paid Cash Card For Consumers

A prepaid cash card is not a credit card since it is not linked an overdraft facility. The concept is basically same as a prepaid gift card or a mobile phone SIM card. We can't borrow money with a prepaid card, we can only spend the money we have loaded onto it. Hence, there is no risk of running into debt as it has no credit or overdraft facility.

Prepaid cash card can help to manage your money safer, easier, and cheaper. Prepaid Visa and Prepaid MasterCard act like a checking account where individuals and businesses deposit money and withdraw funds from their protected account. Certainly, the money is safe in the prepaid card accounts instead of carrying it around in cash. Thus, it's very convenient to sign up for a prepaid cash card.

The usages of prepaid cash card for consumers can be used in a variety of ways :

• It can use to shop, pay bills online, hotel & car rental reservations, and purchase goods & services. To shop online, you'll find the item you want to buy and click on to the website's "checkout" page before filling in your details and those of your prepaid card.
• Prepaid cash card is secured. For instance, users do not need to carry a lot of cash around while u go shopping. It enables consumers to control their spending according to a budget as well.
  
• Apart from that, prepaid cash card can also be used to withdraw cash from ATM with the available amount of money in your account. But, it will cost you a higher service charge.
• Some of the pre-paid cash cards provide you the service by sending and receiving money via bank wire transfer, between two cards.
• Act as a portable access point to checking account.

There are some examples of prepaid cash cards:
1) Touch 'n Go (TnG) smart card

• used by Malaysian for electronic payment system at all highways in Malaysia, major public transpots, selected parking sites and also theme parks.
  
• Enhances the speed of paying.
  
• Convenient as users no longer need to queue up at the cash lane to make payment.
  
• It is expanding its business to retail purchase by starting cooperate with fast food industry that enables consumers to buy doughnut, burger or other fast-foods from 21 outlets such as Burger King, 7-Eleven, Dunkin’ Donut.
  

2) Prepaid Vista Cash Card

• Issued by Four Oaks Bank & Trust Company
  
• Give opportunity for consumers with poor credit record and young children by not over spending than the balance in their card.
  
• Visa permits travelers access to money at automated teller machines (ATM) in 65 countries and book the train tickets by using Metro Card.
  

In my opinion, Pre-paid cash card has become more and more important nowadays, since it is convenient, easy to get and easy to carry. Everyone can simply start using prepaid cash card by loading money at everywhere as well as limit their spending. Nevertheless, it leads Malaysia to a ticketless packing century, and it is an environmental friendly service.

For more details, please click on this picture to know and verify different types of Pre-Paid Cash Cards existed in market.

Mobile payment systems in Malaysia : Its potential and consumers' adoption strategies

Mobile payments is a collection of money from consumer via a mobile device such as their mobile phone, Smartphone, Personal Digital Assistant (PDA) or any other devices. With such application, it brings benefits to the world of e-commerce and it is relatively growing in Malaysia as well.

Some of examples of mobile payments available in Malaysia are mobileExec and Mobile Money. Both are using the concept of making payment transactions just through a mobile device to pay for goods and services anytime without having cash on hand, cheques or even physically present a store. This will be easier and more convenient for users as they go about anywhere to make purchasing.

Companies such as Maxis; HGL Capital Berhad; CELCOM are also coming up with this concept to cater for their customers convenience. Mobile payments services indeed have a great potential and advantage. Consumers are more comfortable with low-value transactions over such non-traditional means. Common applications will include payment for transportation, parking, restaurants, convenience stores, retail outlets, e-tickets to name a few – typically for low-value items. This helps especially when consumers are in need of cash but doesn’t have any in hand, therefore with mobile payments they do not need to even search for an ATM machine to withdraw the needed money for the payment.

Electronic currency

Electronic currency is refers to exchanging or trading the money electronically. A person is able to make payment for the goods or services through the internet. E-currency just like real cash and it is reusable. It has been widely in use in the countries like Singapore and Hong Kong. For instance, direct deposit and Electronic Funds Transfer (EFT) is the main types of the e-currency.

Why electronic currency is created?

As there is the increasing of the criminal case, it creates a lot of troublesome issue if carried a lot of paper money in hand. In order to protect for the users, credit cards, debit cards, online banking, exchanging of electronic currency ahs been created. It has lessened the usage of the paper money and convenient to the users.

There are some advantages of the electronic currency.

1) E-currency provides the confidentiality and privacy for the users. When users sent an e-currency amount to the businesses, it does not contain any private information to the businesses. It is totally different with the credit card system.

2) Security of E-currency is strengthened by using the encryption which is known as RSA cryptography. It requires the authorities to use a trustworthy system and eliminate the risk of breaking the code of a digital signature.

3) As the users are able to transfer the e-currency through the internet, it saves time for the users without going out to the bank to make transaction.

However, there are still some drawbacks of the electronic currency.

1) The major problem may occur is fraud. If users accidentally misplace their private key, the perpetrator may use this opportunity to withdraw their money.

2) Peer-to-peer double spending of digital coins. Let say the users choose not to involve bank as an intermediary. If the digital coins are sent to the wrong places, they have to bear their losses.

Electronic currency has brought a lot of benefit for the users. Nevertheless, there is still need more improvement in the research and development to reduce the risk of disadvantages faced by the users especially fraud.

Ebay is one of the example that are using e-currency.