Credit card

Millions of Americans are being debt by the credit card industry, they are a nation of overconsumers. Too much fatty food, too much energy / petrol / fuels and too much credit ? Yes, that’s

right, too much credit. To those Americans who find themselves now unable to meet their credit

commmitments, this is very much the overconsumption of credit.

This article entitled ‘’ the dangers of credit cards’’ was published on october 5th, 2008 in CQ

Researcher library. It tackles the consumer spending attitude influenced by using credit cards and

how external factors are influencing negatively the credit card users in their day-to-day life.

The author got in touch with two former students burdened by too much debt, according to them,

the very nature of credit cards may be debt traps for unwary consumers of all economic levels, from

students to managers. One may therefore wonder : from a consumption perspective, how the misuse

of credit cards can lead to over-consumption and a compulsive buying behavior ? and from a

consumer perspective, is the credit card the best choice ?

The question will be answered by developing two aspects, one centered on the misuse of credit cards

and the other on the over consumption and the compulsive behavior of the consumer.

On the text there are items that were selected as indicators of credit card misuse :

1) The very nature of credit cards : debt traps

2) Having Multiple credit cards

3) Spending more with a credit card but not without

4) Overuse of credit card : Advertising pressure

5) The use of credit cards to pay for medical emergency

To move on to the over-consumption and the compulsive buying behavior

1) Over-optimism about one’s own earning ability

2) Temptations to spend

Quotations to comment :

1) ‘’..but the very nature of credit cards can make them debt traps for low income people and

unwary consumers of all economic levels’’ , Indeed spending carelessely and affording

spending as much as consumers desire without having the repayement capacity can lead to

over-consumption and thus pilling up of the credit card debt, to restrict spending, the author

failed to mention the available credit card limit that may restrict this spending behavior, in

simplest terms, a credit card limit — also known as a credit line — which is the maximum

amount that a person can spend on their card, set by the credit card issuer. If your balance

exceeds your credit limit, this is referred to as being overlimit. If you are overlimit, a few

things could happen. Some credit cards may decline your transactions if you try to spend

more than the remaining balance. But if the transaction goes through, this can put you over

your credit card limit and you may be charged a fee, also known as an over-limit transaction

fee. To help avoid going over your credit limit, you may be able to set up an alert with your

card issuer.

2) Moving to what the author recalls ‘’ ..But minimum payments ‘’spred out over a number of

cards’’ quickly mounted up to over $100 a month’’, a strong argument can be made for

having multiple cards, yes it can mean multiple fees and interest charges that accumulate in

several places, but it also means consumption and after that overconsumption, because

using several credit cards may lead to unnecessary shopping and cyclic debt every month, if

the credit card holder is prone to overspending or already struggling with credit card debt,

having more than one card is risky. So, if there’s a chance the consumer sees each card as an

opportunity to spend, the credit card here is just a short road to overconsumption.

3) On the other hand, he highlighted ‘’not everyone can handle a credit card. I am generally pro-credit

but with a bunch of caveats, mainly because study after study has shown people spend more on a

credit card’’ , the author takes the view that the interest rates on student credit cards are

frequently higher and some of them charge. If a student pays his bills on time, they won't be a

concern; nevertheless, if he doesn't, he must be ready to pay significant interest. Also

students credit score will decrease if they can't control their spending and pay their obligations

on

...