The Financial Crisis Of The United States Government

Credit cards have become increasingly popular world-wide, making it easier to buy now and pay later but are they actually helping or hindering someone’s credit? “Maxed Out” by James D. Scurlock demonstrates how credit cards can hurt someone’s credit, while “Why Won’t Anyone give Me a Credit Card” by Kevin O’Donnell demonstrates how someone may have financial stability to pay off a credit card, but still be consistently denied one by the credit card companies. Owning credit cards is not the problem; the problem is being irresponsible with it.

The main argument throughout this documentary is that credit cards are the main cause of the debt crisis, which occurred in 2006 in America. Credit cards are portrayed throughout this documentary to carry negative consequences, aiding in the corruption of the system, and ultimately creating debt problems that America faces as a nation. The main question we are left with is, can we as a nation live without credit cards?

It is imperative that young adults comprehend the facets of obtaining and maintaining proper credit in order to sustain a sound credit history. For example, the most widely used credit score is Fair Isaac Corp.'s FICO score, which ranges from 300 to 850. A FICO score of 760 or higher reveals an individual’s respectable borrowing power, for even a recently reported late payment can have a substantial effect on a credit score (Holmes). In addition, young adults can learn the importance of securing proper credit and increase their attractiveness in lender’s eyes by aiming to use less than 20% of one’s available credit (“Get”). Since lenders pay close attention to the amount owed on credit cards relative to the limits provided, lenders are able

U.S. consumers remain addicted to credit. Consumer debt continues to rise to record levels and a significant number of households have lost control of their finances. Credit cards can be a useful financial tool when used appropriately. However, research clearly indicates that consumers are not using credit cards wisely and consumers do not understand the terms and conditions of the credit card contract. Adding to this public dilemma, the practices of numerous credit card issuers have been described as predatory. The Credit CARD Accountability Responsibility and Disclosure Act of 2009, also known as the Credit CARD Act of 2009, is the first major reform of the credit card industry since the Truth in Lending Act of 1968. The Credit CARD Act of

According to the U.S. Census Bureau, in 2010 Americans had $866 billion in credit card debt and its still growing. Huge credit card debt is a huge problem for America and putting credit cards into the hands of kids will only cause more difficulty. Also, there are severe consequences for using credit irresponsibly. In fact, kids do not understand finances and credit enough to use credit cards responsibly. For example, kids who use credit cards won't understand the value of money. Therefore, kids under 18 should not be given access to credit cards.

The article is about why young Americans (millennials) are afraid of credit cards, and why they do not use them. Americans with credit card debt under the age of thirty-five has dropped to the lowest since 1989. Since the financial disaster in 2008, older Americans have lowered their credit card debt. However, millennials’ credit card debt has dropped faster than any other age group. Young people became scared of credit cards because they do not want to owe money to companies like their parents were or are. If millennials continue to use credit cards less, this will hurt the economy’s growth and the financial system. Since millennials refrain from using credit cards, they will lose out on building credit. Building credit brings advantages like

In the article “ The Credit Card Binge : College students are engaged in some risky spending”, by Margaret Mannix; she points out the main ideas that credit cards does to students in college. Credit also ruins lives and it describes how students are targeted and that credit should be avoided at all times. Before anything college students should know what credit does to them if used in the wrong way. Lenders see students with bad credit as riskier than students with better credit scores. They make you pay for the risk that is not worth it and charging you a higher interest rate. This is a great way to inform college students before it is too late.

Financial literacy is essential in living in today’s society, therefore it should be taught at a young age because people have been going bankrupt more than ever before. According to Kelly Walsh, “Students between ages 18-25 have at least one credit card. By the time they graduate half of them have four or more credit cards that have an average balance of $3,000” (Walsh). If students were taught at a younger age how credit cards actually work; they would better understand the consequences of debt. For instance, if students were to research different credit

Whilst a critical part of consumer spending, credit card companies are constantly accused of malicious legal contracts and schemes to increase profits. Without heavy regulation, these companies have the power to bankrupt millions of Americans that rely on credit cards in their daily lives. However, after the introduction of The Credit Card Act of 2009, these accusations represent an inability to accept responsibility for financial blunders on the consumer’s behalf. Due largely in part to the government’s strict regulations, credit card companies should not be at fault for the student credit card debt crisis. Credit card companies remain blameless for student credit card debt as a result of

In May 2009, President Obama stated, “The credit card act was intended to uphold basic standards of fairness, transparency, and accountability (Lindow).” Is this to say that credit card companies were deliberately deceiving consumers to capitalize on profits? Unfortunately, the answer is yes: profit was not the concern of this act, as the banks had abnormally high profit margins. What was in question, however, was the approach of generating these favorable profits for banks (Warren). The Credit Card act provides protection for young consumers with specific provisions such as: fix interest rates, 21 day grace period, the right to opt out of adverse changes in terms, a 21 year age requirement and clearer agreements for transparency.

A tactic used by credit card companies in the past would be to bombard students with attractive offers as soon as they turn eighteen. Additionally, these companies often downplay or hide the terms that consist of high fees or increasing interest rates after the first 6 months. For example, Bank of America recently settled a lawsuit for deceiving customers and charging them for services they did not sign up for when acquiring a credit card-- Bank of America ultimately reimbursed customers over 66 million dollars (Douglas). Financial literacy classes would teach students to be wary of these hidden fees or conditions and to do their due diligence before signing up for a credit card, potentially saving them from unnecessary debt and stress. More recently, credit cards will require a parent to co-sign for young students and will cap the amount of the money they may put on the card, thankfully protecting the student-- and the credit card company. Should a student acquire a credit card to build their credit, they should use a secured credit card which requires a down-payment which will be held for the life of the account, and allows the cardholder to only spend up to that amount. Personal finance classes would teach students the responsibilities that come with a credit card and what to look for when signing up for

Students do not have the education needed to use credit cards responsibly. Nellie Mae (August 2007) states

Credit cards became a severely important and reliable method of payment. Not only is it is extremely convenient but building good credit became a necessity. In 2011, credit cards were being used for over 22 billion transactions that consisted on living an average lifestyle valued at a projected 2.1 trillion dollars. Consumer involvements and outlooks toward credit cards, as revealed in user surveys, may be subjective by overall lucrative circumstances, clients who own monetary conditions; the involvements of friends, family members, and colleagues; enclose broad knowledge conveyed by media reports about the credit card market. Customers with a stable occupation and growing salaries, for example, may have

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.

In this day and age, credit cards can be a lifesaver at times but can also cause a major financial burden at other times. Credit cards do have their advantages and disadvantages, which we will look at shortly, but by gaining a little knowledge, principle #1, on how to manage them better you will be able to get the most rewards from using them without them becoming a financial problem. We will also look at the CARD Act and see what new changes it brought to the table and how it helped the credit card user. Let us start with the many positive attributes of credit cards.