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[04:34:05 AM Monday, November 12, 2007]
Applying for Another Credit Card to Make Ends Meet?America is a truly wealthy country - it is irrefutable. But can the same be said about its residents, common consumers? Where is most customers' money concentrated and who actually owns it? It appears, and it is also irrefutable, that most people live on credit borrowed from a bank or credit card company and these institutions are the real owners of the national money. It has been assumed that applying for credit cards became a common way for many American households to make ends meet. Demos, a think tank where social and political changes are analyzed, has published a report documenting this reality based on the indebted household's income, age and race. Facing a steep rise in costs for healthcare, education, home partnership and fuel on the one hand, and continually flat wages on the other, the average American family had to turn to a credit card as a rescue in most hard financial times. Lots of outside observers are convinced that most credit consumers in the USA are addicted to credit cards just out of their "get now and pay later" inclination. But not many seem to be aware of the actual reason for making the first credit card application. In most cases, it is not the lavish credit card rewards and not the all-round acceptability and convenience of use. Many customers may have first applied for a bank card to be able to pay for groceries or for utilities or gas. The situation has not changed and consumers are becoming more and more dependent on the small plastic in their pockets which allows them to pay for everyday small but necessary expenses. This habit initiated and still keeps up the consumer's bad debt, known simply as credit card debt. According to the Federal Reserve's survey of 2004, three out of every four American customers carried at least one credit card and since then the number of plastic cards per household has been rising, adding up to the huge national credit card debt. Following from this, there turn up big questions - is borrowing to make ends meet paying its way? Does credit really give rescue? Have American families got any relief from the ever growing financial pressure or have they got poorer giving the last they have to the credit card companies? It appears the answer lies in the behavior of the cardholders themselves. Credit card misuse, that is spending in excess and not paying the balances, causes an even worse financial situation. Smart users, on the other hand, enjoy various credit card benefits and dictate their own rules to the lenders. Smart users never forget that companies are always ready to challenge their spotless behavior and charge them exorbitant fees and charges which first appeared in the time of credit card industry deregulation. The deregulation shifted credit companies' priorities and prompted them their present-day predatory policies however avoidable for disciplined cardholders. Many people today have forgotten about the ringing cash in their pockets, depending on the convenience and benefits of credit cards. But they should never forget that a plastic card is most useful in urgent situations - not at a nearest fast food - that's how it helps you make ends meet. |
