Living by Credit

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Recommended: American consumerism culture

The introduction of the credit card first came around while the economy was booming in the early 1950’s. American consumers were in buy mode and the credit card was a genius idea to let people buy now and pay later. At first look this idea seemed great but what looks and sounds great does not always mean that it is going to be great overall. Over the years credit agencies have released thousands of credit cards with several questionable polices and high interest rates. “Any given American family in the present day possesses an average of eight credit cards with about 15,000 dollars of debt”(Canner 8). Many consumers have become addicted to wasteful cyclic consumption and living beyond their income due to the ownership of credit cards. The invention and continued implementation of credit cards into the American economic and social systems appears to be the cause of the struggling economy, the weakened U.S. dollar, the sky rocketing prices of gas and grocery store goods, the all-time highs of American debt, and social deprivation in some regions. One of the biggest issues with owning a credit card today and leading cause of American debt is the devastating interest charges. Interest on a typical credit card is compounding monthly. That means the interest that is being charged is added to the principal balance at the end of that month. So if there is a 20% interest rate on a $1000 balance 200$ would be tacked on to the bill. The next month the same interest would be tacked on the new balance of 1200$. This type of interest causes the debt to grow expeditiously. This debt is considered a revolving debt meaning it is a balance held or carried over every month. “Currently there is at least a trillion dollars of open revolving debt fr... ... middle of paper ... ...onomy growth has stalled dramatically. The federal government creates more money to cover the interest of debt payments which just postpones the inevitable of default or bankruptcy. People need to realize that when they buy what they cannot afford with credit they are contributing to what could be the crash of the American economy. Works Cited Canner, Glenn B.Elliehausen, Gregory. "Consumer Experiences With Credit Cards." Federal Reserve Bulletin 99.5 (2013): 1. MasterFILE Premier. Web. 22 Mar. 2014. Joseph, Peter, prod. Zeitgeist: Moving Forward. Zeitgeistmovieofficial, 2010. DVD. 21 Mar 2014. Klein, Lloyd. It's In The Cards : Consumer Credit And The American Experience. Westport, Conn: Praeger, 1999. eBook Collection (EBSCOhost). Web. 22 Mar. 2014. Sneddon, Gregg. "Money The Credit Trap." Finweek (2013): 46-47.Business Source Complete. Web. 22 Mar. 2014.

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