In the United States, the debt levels of Americans have continued to increase since the 1980s. It was during this time that the use of credit cards greatly increased. Credit cards companies begin looking for different ways to market their products to consumers, and used such things as direct mail, commercials, and other marketing tactics.
It was during the 1980s that consumers begin moving away from cash and checks into credit cards. The cause of this is often attributed to the start of the information age. As the use of computers became more widespread, credit cards quickly followed. It is estimated that the number of people using credit cards during this time surpassed those who were using checks and cash in a single year. The use of debit cards has grown tremendously since this time as well.
The rise of debit cards are a direct result of the problems seen with using credit cards. Statistics show that the average American consumer owes about $9,000 in credit card debt. Many people have made the mistake of thinking that they are using their own money when they use credit cards to make purchases. It is easy to forget that this money is owned by the credit card companies, and they are simply allowing you to borrow it, with the promise you will pay it back. The average interest rate owed on credit cards in the US is about 14%.
It is easy to view credit cards as being "easy money." After all, you don't have to work for it, and it doesn't have the same effect on you that cash has. Statistics show that people have a tendency to spend the money of others much faster than their own. Recent data also shows that Americans are paying even less of their debts than ever before. It was recently on the news that the savings rate for Americans is negative, at about -0.05%.
Though we live in an electronic age, being irresponsible with your credit cards is a great way to end up with a life time of headaches. Many high quality jobs now require you to have good credit, and it is difficult to get a mortgage or a car if you have poor credit. This is why it pays to be responsible with how you manage your finances. It is best to stop borrowing money and use your own funds to make purchases.
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