The American peoples debt is almost entirely the faults of all those who participate in the active use of the credit cards solicited to them. This is due to several factors, the first of which is the ability of classes below the Upper-Middle and Upper classes being able to acquire credit cards easily and readily. The second reason is that the interest rates of these credit cards, set by the companies that advertise and produce them, has been and, in the foreseeable future, will be extremely high. Finally, the credit card debt is such a problem today because the market for credit card companies is so concentrated that isn't regulated enough to make any difference.
Credit cards have a history stemming back to the mid 1900's, when there were two types of cards, both of which are still around, the card for specific stores, such as Sears, and the card for the occasional convenient spending when you didn't have the money you needed right away. The difference, however, between now and then is that only the extremely financially stable were using the latter of the two cards. The cards, such ...
A credit transaction is when a consumer purchases a good or service and pays in the future. The use of a credit card can be useful as it is convenient, saving time and trouble. However, due to the extensive use of credit cards in Australia, legal issues has arisen such as the inability for consumers to repay their debts, unfair contract terms and inadequate procedures of credit providers. Prior to 1996, the Credit Act 1984 (NSW) was introduced as the only piece of legislation that regulated customer credit. However, because it only offered protection for less than 20% of consumers, the Consumer Credit Code was established in 1996 under the Consumer Credit (NSW) Act 1995 (NSW). This code is a set of uniform national rules about consumer credit transactions and has been adopted by all governments throu...
"Debate on Student Loan Debt Doesn 't Go Far Enough." Applebaum, Robert. Hill (2012). Print.
However the interest we pay on our nation 's debt is very small compared to the overall budget. According to the Center on Budget and Policy Priorities only 7% of the total budget is spent on interest which is relatively low compared to things like social security which took up 24% of the budget in 2014 (Policy Basics). As long as the United States can continue to keep the interest rates low the debt will continue to be a begin threat. If the creditors of the U.S. were to spike their interest rates, America would be in trouble, however America has fairly good credit, and it should remain that way unless there is another scare like the government shutdown in 2011 (Riley). Overall the threat of the nation debt is a very minute problem in the grand scheme of things. According to The Richest, only five nations in the entire world are completely debt free, which is astounding when you consider that there are about 195 countries in the entire world (Mathers; How Many). These figures show how extremely difficult it is for a country to run without having a certain amount of debt, and America having debt should not be a concern. America is not even in the top ten countries whose debt make up the majority of their GDP (Country List). Which means that at the moment American’s should not be overly
As of today America’s national debt is 18 trillion dollars and approximately 5 trillion of that is held by foreign countries including China and Japan. In the last few years we seem to hear more about balancing the country’s budget and politicians raising the debt ceiling so we can pay on this debt. How have we gotten into such an overwhelming and complicated problem with our nation’s money? Ironically the same can be said for our individual household debt as well as making the same mistakes and trying to find creative ways to be accountable to our financial responsibilities. Teaching the basics of personal finance n our schools can culturally change our financial practices, leading to a more financially literate public and a stronger, more stable, America. If the younger generations can become more financially savvy, then there is an opportunity for our nation as a whole to become less dependent on debt to survive.
Credit card debt is one of this nation’s leading internal problems. When credit was first introduced, and up until around the late 1970’s, the standards for getting a credit card were very high. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005
All but four countries in the world has external debt (“Country Comparison: Debt External”). Having a debt is almost as common as having a mortgage. Since its establishment, The United States has always been in debt (“Historical Debt Outstanding – Annual”). The US national debt has had five sharp increases previously in its history. The reasons include civil car and the two World W...
First, and perhaps most important, unemployment is a big issue in our society today and it is the leading cause of loan repayment default. Many wish to pay their loans but cannot afford to, they have basic needs to meet in order to survive, got families to cater for and other ambitions that they cannot even meet. At the time while they wait or seek for jobs, their loans accumulates and reaches a point at which they would rather pay the interest and leave the principal while some cannot even afford to pay at all. So how do we blame these people for not paying loans? Every American in general works their asses off just to get a living. Having a l...
Credit cards are something that are almost needed in everyday life now, as most dont have the money available to purchase a car or house and so need credit, thus needing credit cards to help build that credit. Those cards are hard to handle, and receiving applications in the mail daily, and commercials appearing on television don’t seem to make the struggle of staying away any easier. This starts to spark an interest. So people begin to think, "I think I 'm responsible enough to get a credit card, I 'll only use it for emergencies." Then the application process begins and it may take a couple times to finally be approved for one. This only makes it worse, of course, because realizing how long a credit card wasn’t applicable to life, but now
People often hear that they need good credit to get a Visa credit card. However, those who “only” have fair credit may assume that these types of credit cards are out of reach. Additionally, those with fair credit might also feel like the criteria placed on them by card companies to get a credit card are impossible to achieve. It’s a Catch-22, really. Most people can’t get a credit card unless they have good credit, but they can’t get good credit if they don’t have a credit card.
I would have less as a problem with this if I did not see it used in such wasteful ways. A few days ago I was standing in the checkout line in Walmart. The people in front of me seemed like a higher class family, both of their kids had the new Iphone, and their cart was piled high with the more expensive foods. Then they pulled out a bridge card to pay for it all…. at that moment my face had a what-the-cheese-just-happened expression plastered to it.
The article titled “You Are What You Owe,” centers around the recent gridlock in Washington over the debt ceiling (Mallaby, 2011). The article explores what would have happened had the United States government not come to an agreement on the American debt ceiling. The article also relates the United States crisis to previous counties that have faced this crisis in the past (Mallaby, 2011). The article reports on the finance and economic conditions in 2011 in the United States during the debt crisis (Mallaby, 2011). The article also discusses the American credit and bond strength and government’s securities, as well as the United States federal debt (Mallaby, 2011). The Gross Domestic Product or GDP, for different countries is also discussed in this recent article (Mallaby, 2011). The United States foreign economic relationships are also explored in the article titled, “Yo...
Credit cards seem to be the easy way to purchase things. If you want a pair of pants but don't have the cash, you can just charge it. In reality, credit cards are not that easy. Once you are approved for a card the company gives you a credit limit, which is proportional to your income. On the average, an eighteen year old would have about a $250 limit. Which is good because it means teenagers cannot charge past the maximum amount of money. When a credit card is maxed out it means that you have hit the highest amount of money you can spend and it won't let you spend anymore. A month later when you receive your bill, the full amount will be shown and the minimum amount owed. The minimum amount is a feature on a credit card that allows the buyer to pay only a certain small sum of the money. For example the bill is $222 and the minimum amount you can pay is $15-$25. If you choose to pay the minimum, the interest value comes in. Each time you don't pay in full, interest rates are charged onto the original bill. This is how people with credit cards run into debt.
... people are concerned about the size of the U.S. national debt. They fear that a large amount of debt harms the economy and feel that the money used to pay interest on the debt could be better spent on other uses. Some people are also concerned about the ability of future generations to pay back the debt. However, many economists argue that the size of the debt is misleading. They point out that an important measure of the severity of a nation's debt is its size as a percentage of the nation's gross domestic product. Based on this measurement, the national debt of the United States during the mid-1990s was about half the size of the U.S. debt at the end of World War II in 1945. Other economists contend that when the balance of the debt is compared between years it does not account for the effects of inflation, which makes balances from later years appear larger.
If we don 't have credit cards, we can’t build our credit history. If we don 't have a credit history, we aren 't allowed to buy cars or houses with low monthly payments. Having credit cards is a cycle in life because without one thing, we can 't have the other. When people have credit cards they have to use them. It doesn 't help that banks offer many credit cards to people, ending in high debt. Banks also encourage low monthly payments. If people pay low monthly payments, they will never end up paying their credit card debt off. They will probably end up paying for the objects they bought, two or three times. People aren 't forced to pay high monthly payments in order for it to take longer to pay the card off. If it takes longer for a person to pay a credit card debt, the credit card companies will be making a lot of money. I can definitely say I have experienced this because I am always offered to get a credit card. There are many stores that carry their own credit cards, and offer them for their customers. Offers are tempting and they can add to a future of credit card debt.
Q: What is the impact of credit card use and how has credit card debt affected?