Essay On Consumer Credit

1255 Words3 Pages

Choosing Paper Over Plastic

Consumer Credit is defined as a debt that a person incurs for the purpose of purchasing a good or service. This includes purchases made on credit cards, lines of credit and some loans. Simply speaking, consumer credit is essentially a sum of money obtained by an individual to make a purchase of a non-investment good whose value depreciates quickly. Examples would include clothing, entertainment, automobiles and recreational vehicles. Some consider it a blessing that credit can be so easily obtained, while others see it as an impairment of our society. Cards can be crucial in cases of emergency yet millions of people are living beyond their means, drowning in debt while foregoing the discipline of saving for
Instant gratification is the desire to experience pleasure or fulfillment without delay (Vernimmen 20). Foregoing instant gratification and insisting on a savings plan is imperative to our societal expectations. Many people see credit as free money and get into debt because of their consuming passions. Consumer marketing has done a fine job of convincing us that we have to have the latest clothes, the best shoes and the newest gadgets. Creditors have exploited this desire through buy it now, pay later schemes (Morris 08). While some may dismiss these issues as someone else’s problems, overwhelmingly we have developed a societal issue where a substantial subsection of society is drowning in debt and not able to support themselves in retirement. In Alexander Daskaloff’s book: Credit Card Debt, an example of a should-be-retired financial executive is provided. “Because of a disappointing investment decision, he has accumulated a large amount of credit card debt. He currently owes $20,933 on six credit cards at an overwhelming 17.35% interest rate. Unfortunately, instead of saving for retirement, a substantial amount of his income is going toward his credit card debt. Because of high interest, he sees very little of the debt declining, which worries him as he approaches retirement.” (Daskaloff 7) Unfortunately this example has become entirely too common in our society. In a capitalist society, we have a responsibility to each other, if able, to take care of ourselves and plan for our own financial futures. In this example, it is particularly telling that the subject is a financial advisor. He understands the system and the pitfalls, yet was still trapped by the desire for instant gratification. Like so many, he over used his credit rather than planning and saving for retirement. Ultimately, we have a responsibility as

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