According to the article “It is Possible to Live Debt Free” the average american household expenses outweigh their net income by more than five thousand dollars. Consumer debt is a huge problem that really peaked during the recession of 2008. Consumer debt is when someone buys a good/service intending to pay for it later. The American people need to change the way they pay for materials and how casually they accumulate debt. What is a justifiable reason to go into debt? Debt can be a petrifying burden if we let it accumulate. The easiest way to pay off that debt is to not let yourself get into debt. A majority of consumer debt is built up though minor decisions and purchases everyday. To live as debt free as possible the consumer should create
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Credit score is number based on all of the times a consumer has bought something through a credit card and whether or not they payed it back or not. When a consumer pays back what they spent their credit score goes up. Landlords, banks and others use this score to judge if the consumer is worth loaning to, and if the lender believes they will get their money back. A good credit score can help the consumer invest in themselves buying a house, or even renting an apartment, however if the consumer does not pay back that debt they have acquired their credit score goes down. When a consumer has a low credit score it makes it nearly impossible to obtain a loan, and when they do it's at a higher interest rate. More and more families are not only using the credit card as a way to establish credit, but also as a way to buy the things they couldn't afford. “ The share of families with high credit card payments—above 10 percent of income—rose from 13.5 percent in 1989 to 23.0 percent in 2004”.(Weller) Consumers need to be aware that credit cards can help but also hinder if used incorrectly. Consumers should only spend money on a credit card if they have the money set aside to pay back later therefore establishing a better
Credit score is number based on all of the times a consumer has bought something through a credit card and whether or not they payed it back or not. When a consumer pays back what they spent their credit score goes up. Landlords, banks and others use this score to judge if the consumer is worth loaning to, and if the lender believes they will get their money back. A good credit score can help the consumer invest in themselves buying a house, or even renting an apartment, however if the consumer does not pay back that debt they have acquired their credit score goes down. When a consumer has a low credit score it makes it nearly impossible to obtain a loan, and when they do it's at a higher interest rate. More and more families are not only using the credit card as a way to establish credit, but also as a way to buy the things they couldn't afford. “ The share of families with high credit card payments—above 10 percent of income—rose from 13.5 percent in 1989 to 23.0 percent in 2004”.(Weller) Consumers need to be aware that credit cards can help but also hinder if used incorrectly. Consumers should only spend money on a credit card if they have the money set aside to pay back later therefore establishing a better