Credit Card

The reasons we as Americans buy on credit varies, but without it most of us would


probably never be able to purchase necessities such as a home or automobile. The nation's


economy depends on credit, the promise to pay later for goods and services used today;


but along with consumer credit comes consumer debt. With the rise in telemarketing and


commercializing in America it is no wonder why Americans feel the impulse to buy now,


pay later. The most common form of consumer debt is installment debt, which is when a


consumer borrows the money to purchase an item and agrees to repay the loan in equal


installments over a fixed period of time.


Without installment debt most consumers could not afford to purchase items such


as a home. The truth of the matter is that we, as Americans, tend to want to purchase


more than we can afford to purchase when we want it. But, we can afford to pay it out,


over time, in fixed payments.


Mortgages, a debt owed on real property, are the latest form of installment debt.


Other forms include automobile loans and credit card purchases. Just pick up the


newspaper any time after Christmas and you will find articles on managing your mounting


debt from Christmas.


Not realizing the extent of the consumers' debt is one of the most common types of


credit problems. Denial may play a partial role in this problem, but the lack of education


seems to be the largest reason for consumer debt. Credit card use is up 20% and a large


number of Americans do not know the percentage rate at which the credit card companies


charge. Many credit card companies have started "personalizing" interest rates by not


disclosing the interest rate until after the consumer has received the card. By not


disclosing the interest rate on the application the credit card companies prohibit the


consumer from shopping around...