Credit Card Debt - A Modern Day Epidemic

There was a time in the not too distant past when the vast majority of people didn't have a credit card; never mind credit card debt

. If we wanted something special or needed to replace something we would work our butts off to raise the cash to pay for it outright or just simply do without.

Sure it was a pain having to wait for what we wanted, but back then debt was something that wasn't taken for granted and few of us would dare stray into that bottomless pit called debt, bar having a mortgage of course.

How time has moved on though. It is blatantly obvious to anyone that remembers the days before credit cards and credit card debt that there is a complete disregard for the value of money nowadays. Young and old have jumped on board the free money train, spending cash they haven't got on things they really don't need, sure I sound like an old killjoy but sometimes I wonder, where is the personal responsibility that goes with the power of credit on tap, where is the restraint?

I do however, have a degree of sympathy for those who were born into this spendthrift society in which we all now live where financial flippancy has replaced good old money management I wish people who have never experienced a cash up front world could do so. It is something that back then I never thought would be of benefit in the future but it is the type of experience that many could well have done with.

Credit card debt has been reaching epidemic proportions for a while now and the economic climate of the last two years has really highlighted the issue. Defaults on payments and people filing for bankruptcy have reached record breaking levels and credit card debt has played a large part in this.

So, whose fault is it?

It would be too easy to blame the public who have used their credit cards excessively; but at the end of the day, if they had used them sensibly and not extensively we wouldn't be in this mess, but what made them think that it was OK to use their credit cards in this way?

This is where the credit card suppliers and the financial institutions can take their portion of the blame. Credit cards have been literally given away and are way too easy to obtain, lines of credit were extended way beyond that which individuals could afford to pay back; it was a car crash waiting to happen.

The recent boom years of consumer spending were false years of wealth; people spending money that was either on credit cards or from equity release but not earned, it was only a matter of time before the walls came tumbling down, and that is what the last two years have been about. Sure people will point to the sub-prime mortgage fiasco but that was just the straw that broke the camels back, the damage was done in the previous 10 years.

There was a time when the image of banks was that of the Dickens' Scrooge character, happily counting peoples money and very reluctant to give any out in the shape of loans etc. It didn't take long for the banks and the other financial institutions to realize that they could make an absolute killing on the interest made on credit cards so they openly pushed the use of credit cards for purchasing absolutely everything you need, groceries, gas anything; the result: Increased credit card debt.

Unfortunately, there is little we can do but ride out this storm and try to keep our heads above water; but if we don't change the way we use credit cards and how we look at personal debt, I'm afraid that what we are currently experiencing will repeat itself over and over again.

by: Daniel Major

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