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...