The Reasons For The Debt

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The reasons we as Americans continue to be in debt vary in different ways depending on how they handle their money. Consumer debt is defined as “debt incurred by an individual primarily for personal, family, or household purpose.” There are many different types of consumer’s debt, which are credit cards, mortgages, student loans, car loans and etc. The entire economy mostly depends on credit; the promise to pay later for goods and services used today; but along with consumer credit comes consumer debt. All these different types of consumer debts leads to many externalities all around the world which can create a large impact in our society and a problem to the consumer if they are not able to pay it off. Credit cards are one of the major types of consumer debt in which has increase over the years. It’s known to be the third largest source of household in obligation. People tend to keep spending more and more with credit cards and having a long-term period to pay these amounts because of interest rates. Interest rates are also a huge factor that plays in role with credit cards that leads to consume debt. We the consumers have created billions of dollars worth of debt over the past years, and credit cards is the main component. According to Tamamara E. Holmes who wrote statistics on credit cards said, “Credit cards debt fall along with consumer spending during the 2008 financial crisis and slow growth has kept total revolving debt at pre-crisis levels, though it is creeping

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