Credit Card Crisis For Students And Small Business Owners

Better Essays

Name: Muhammad Shakeel
Class : ENGL 109M
Prof: Blair Overby
Audience: Consumer/Students and small business owners.
Credit Card Crisis for students and small business owners.
In the modern era, credit card is being the efficient and secured form of payment which is becoming a necessity for every individual rather than a choice. Especially in United States of America, credit card is being considered as an essential part of life. Since the introduction of Credit cards back in 1920s, the payment system has been revolutionized and there has been a major transformation in the American economy. However, the excessive use of the credit card has resulted in a crisis which is affecting not only the individuals but whole of the country’s economy. …show more content…

Further, credit card allows an individual to borrow someone else’s i.e. Credit Card issuer’s money to make payments. The scheme of the credit card is that the consumer making the purchase through credit card is actually borrowing money from the Card issuer instead of using his own money from his bank account, while the money borrowed can be considered a type of loan. Credit card issuer allows you to pay back the money wholly or partially. After each month, the consumer receives the bill from the Credit Card issuance company which comprises of list of purchases made by the individual, the minimum payment due, the total amount and any other fees if added by the Issuer. However, the issue arises when the consumers/individuals choose to make the partial payment of their dues i.e. the minimum payment due on the credit card, the Issuer will start charging interest on the remaining balance and the individual in such condition will had to struggle hard in order to clear all the outstanding dues. For example, if a consumer receive a total bill of $500 and opt to pay the bill in a span of one year while being charged 18 percent interest, at the end when consumer will clear the total amount he’ll be paying almost an extra $100 to the issuer as an interest. (Jennifer Barrett, 2009)

Get Access