America has a huge problem with debt. Millions of Americans are drowning in debt that they cannot afford to repay anytime soon. Multiple reasons exist as to why we are so dependent on credit. Is there really any one party that we can blame for this crisis?
The Role Of The Consumer
Consumer spending is what drives the American economy. Lenders were willing to extend lines of credit on the basis that spending money is good for everyone. The consumer gets what they want, a business makes a sale and the lender will make a profit on the loan. Consumers are partly to blame for the debt crisis because they choose to make purchases that they could not always afford. Some consumers will use tools such as credit consolidation as an excuse to spend even more money.
The Role Of The Creditor
Credit card companies need to make a profit. However, the rules that are on the books give them too much power to abuse the consumer. Charging interest rates of over 20 percent is only going to cause more hardship for consumers struggling with debt. Late fees and other penalties that creditors assess can just make the problem worse. Creditors are partially to blame because they can create conditions that make it hard to ever be truly out of debt. There should be little wonder why credit consolidation [http://creditconsolidation101.webs.com/apps/blog/show/12729080-getting-help-with-credit-counseling] services have become so popular over the past decade.
The Role Of Society
Society says that you need to have the biggest and best of everything. The future consequences don't have any impact on you right now. This line of thought persists even when pursuing an education. It isn't enough to simply get a high school diploma anymore. You have to go to an expensive college to find a good job these days. Securing that college degree can put a young person in thousands of dollars worth of debt. Parents can only do so much to help their children before they go broke as well.
America is staring down the barrel of a major debt problem. However, changing our attitudes about using credit can help to stave off any future bad results. It is important that consumers, creditors and society at large stop creating a culture where credit is the easy answer to all our financial issues. In reality, it could be just the thing that is crippling our financial future.
The Role Of The Consumer
Consumer spending is what drives the American economy. Lenders were willing to extend lines of credit on the basis that spending money is good for everyone. The consumer gets what they want, a business makes a sale and the lender will make a profit on the loan. Consumers are partly to blame for the debt crisis because they choose to make purchases that they could not always afford. Some consumers will use tools such as credit consolidation as an excuse to spend even more money.
The Role Of The Creditor
Credit card companies need to make a profit. However, the rules that are on the books give them too much power to abuse the consumer. Charging interest rates of over 20 percent is only going to cause more hardship for consumers struggling with debt. Late fees and other penalties that creditors assess can just make the problem worse. Creditors are partially to blame because they can create conditions that make it hard to ever be truly out of debt. There should be little wonder why credit consolidation [http://creditconsolidation101.webs.com/apps/blog/show/12729080-getting-help-with-credit-counseling] services have become so popular over the past decade.
The Role Of Society
Society says that you need to have the biggest and best of everything. The future consequences don't have any impact on you right now. This line of thought persists even when pursuing an education. It isn't enough to simply get a high school diploma anymore. You have to go to an expensive college to find a good job these days. Securing that college degree can put a young person in thousands of dollars worth of debt. Parents can only do so much to help their children before they go broke as well.
America is staring down the barrel of a major debt problem. However, changing our attitudes about using credit can help to stave off any future bad results. It is important that consumers, creditors and society at large stop creating a culture where credit is the easy answer to all our financial issues. In reality, it could be just the thing that is crippling our financial future.