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Living By Credit Essay

1106 words - 5 pages

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 ...view middle of the document...

Many people might say that buying, borrowing, and spending is good for the economy which in many cases is, but not when it is in the form of a credit card. Over time that interest is going to compound and will become so overwhelming to individuals that they will not be able to spend any cash on the economy. Documented in the Federal Reserve Bulletin of 2013 by Gregory Canner, “As a consequence of the Great Recession and the slow economic recovery that has ensued, many consumers have experienced difficult financial circumstances. Large numbers of consumers have fallen behind on their credit card payments, causing delinquency and charge-off rates to rise sharply.” Many people will eventually not be able to afford the payments of their credit card debt and default or file bankruptcy which destroys the economy even further.
Credit cards are based on a debt monetary system that creates money to cover other outstanding debts which in turn creates bankruptcy and inflation. There just is not enough money created in the economy to cover the extreme interest charges from credit cards. “This creates a spectrum of ongoing deficiency, which moves like a cancer between individuals, families, cities, states and countries. This debt phenomenon is like a cruel social experiment”(Joseph). The feeling of having monumental debt and being on the verge of bankruptcy cannot only negatively affect the economy but also take a toll on individual people’s relationships with others in society as well as family relationships. “Consumer credit plays a more subtle but significant social role in the cultural framework of American Society”(Klein 2). I have seen one case when two people got engaged and then later when it was time to get married one of the parties found out that the other party had an outrageous amount of credit card debt and called the wedding off. There are many instances where people could be trying to buy a house or a car and cannot do so because they have previously defaulted credit card debt. This plays a monumental part in a person’s feeling of their social status.
Credit agencies use credit cards as a tool to control the American public’s ideas about money...

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