The Impact of Credit Cards on American Society

Delinquencies in making credit card payment and high credit card balances have become the norm in American society. As a result many Americans are up to their eyeballs in credit card debt.

Reality

Many Americans have become dependent on credit cards instead of using cash to purchase various items. This is due to the fact that credit cards are readily available to consumers on the drop of a dime.

Intention

Companies issue credit cards to consumers to determine their risk factors, for example, how often consumers are making payments on time or late.

Positive Impact

Lenders will offer lower interest rates to credit card users who are responsible in making timely payments on their credit card debt.

Negative Impact

Credit card debt is usually unsecured debt. Unsecured debt means there are no assets associated with taking the debt. Credit card companies cannot come after consumers' assets if they default on a credit card debt. However, consumers who decide to default on their credit card payments are less likely to obtain future credit cards or any kind of loans because they have proven irresponsible with managing their money.

Credit Counseling

A reputable credit counseling center can help many consumers manage their credit card debts if their debt comes unmanageable.

References

• The Federal Reserve: Changes in U.S. Family Finances from 2004 to 2007: Evidence from the Survey of Consumer Finances
• ABC News Money: Credit Card Companies Forgive Some Debt

Resources

• Federal Trade Commission: Knee Deep in Debt