Recent studies indicate clearly that many Americans are in need of debt relief because of their extensive use of credit cards. What isn’t nearly as obvious is the reason why this situation exists. Here are some factors to consider:
The debt problem American’s are facing exists, in part, because consumes have spent more than they earn, which has even affected the spending of government on the federal, state and local level. Many now see that the problem will not improve until we start practicing more self-discipline and consumerism becomes less significant in our culture.
By using aggressive marketing methods, shrewdly worded contracts, and an array of additional fees, many credit card companies are taking advantage of the American public to boost their bottom line while lobbying heavily against bankruptcy relief at the same time.
With banking deregulation—along with the relaxation of federal and state laws related to consumer usury, consumer education and marketing strategies—the credit card industry is flourishing while our country’s financial health is declining noticeably. In a sense, this is not surprising, because our legislators in Washington remain partial to the credit card companies and are irresponsive to the debt relief American families need as well.
“Real wages” have remained flat for a decade, and the cost of housing, healthcare, education and transportation has risen significantly during the same period. As a result, consumers have been relying on the use of credit cards in order to provide necessities for their families, rather than luxuries.
Of course, all of the factors mentioned above have contributed to rising consumer debt in the United States. The only way to resolve the problem is through a combination of sound government policies and consumer education, and it is imperative to take these steps sooner rather than later.