The Use and Abuse of Credit Cards

Because of the Fair Credit Billing Act, individuals have more purchase protection using a credit card than with cash or a debit card (Williams, n.d.). Importance of this protection occurs when there are reasons to dispute charges such as when merchandise is not received, identity theft has occurred, or items are not charged correctly (Williams, n.d.). In addition, credit cards are invaluable in emergency situations from vehicle repairs to health issues (Williams, n.d.).

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 purpose of usury laws was to regulate the maximum interest rates of loans. This law was created to protect borrowers from excessively high interest rates. It insured that lenders could not put the borrower in a situation where they were not able to fully pay off their debt. However, as said on investopedia.com, “In the United States, individual states are responsible for setting their own usury laws.”

Buyers are the wildcard in the retail industry. Being able to research products for quality, suitability and price online, consumers are able to move from retailer loyalty to brand loyalty, giving them a lot of power. However, loyalty card systems increase the likelihood that shoppers will stay loyal to certain stores.

In today’s world most people have a credit card by the time they turn eighteen years old. Nerd Walt, a financial website, stated “Average credit card debt in 2013 reached $15,480 per household in the United States”. (Bower) The average household credit card debt has probably increase since the 2013 study. “Overall U.S. National debt is rapidly approaching $18 trillion” (Bower). “20% of credit card users often pay off monthly balances on two or more credit cards” according to a study (Bower). In today’s society it is normal to swipe a credit card to buy your children Christmas, because credit card companies now offer rewards where an individual receives money back or maybe even a discount flight. People used to not want to buy their children’s Christmas on credit, but rather work a little harder and save up the money to buy it. Children now days see their parents buying them stuff on credit card, so when they become teenagers they expect to receive everything they want even if their parents cannot afford it. When the child becomes a teenager, and they are finally old enough to get a credit card they take advantage of the credit card. Young adults should learn to spend their money wisely and efficiently at that age.

This semester having to track all of my buying has been very helpful and eye opening. I was able to break down all of my buying into 8 categories; clothes, food (groceries), food (restaurants), entertainment, gas, gym, miscellaneous, and school. I was able to conclude that most of my purchases were paid with a debit card with the exception of my school payments. Most of my purchases were in store with the exception of a few purchases online. The majority of my purchases were wants and not necessities, and after doing this project throughout the semester I have a lot of unnecessary buying. This paper is a reflection of all of my buying.

Consumers use credit cards for numerous reasons. Those reasons are: the earning of cash back, safety, points and frequent-flyer miles, universal acceptance, and to build credit (Investopedia.com). Credit cards can allow for cancelations a payment on a service that did not meet the expectations of the consumer, which is really beneficial. However, consumers own a few too many credit cards that all have different interest rates. The reason credit debt is so astronomical, is because consumers are paying the required minimum payment

Many of our time rely on credit and debit cards when purchasing items. While the two seem identical to one another, failure to know the difference can result in an economic catastrophe on the card owner's part. Debit cards are used as a way to spend money that the consumer already has by withdrawing the purchase amount directly from their account. On the other hand, credit cards allow the card owner to borrow money from the bank, in which the card is issued, up to a certain amount in order to make a purchase which they will pay back to the bank at a later date.

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.

As a ‘fundamental objective ' is about the convenience of online shopping. They are comments, online shopping is easy to find trade from different suppliers at home without having to go to the store. So, it will save you time, then shop in a store, in a retail store you have to go out to a store to another store. In addition to the convenience, customers can shop online without any time limit. You can search the World Wide Web online from Monday to Sunday, is open all year round 24 hours, anytime. It is also convenient for customers to share information through chats or discussion forums, to help others make better buying decisions. This is because the Internet a wide range, customers allow stores around the world, achieving great Internet sales, and comparison shop from the comfort of your home. Online shopping convenience to remove restrictive customers shopping in a store or purchase items they must be based on what is available locally. Online shopping at home than to spend time in places, gathered together more safely. This idea would also apply during peak seasons, such as the lunar New Year, Hari Raya Puasa, Deepavali and avoid large crowds during the Christmas holidays. In this way, it may lose the shopping for outdoor fun. In – store shopping could make social connections than that shopping independently

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

When you use a credit card, it is just a form of plastic money that you can spend even if you don’t really have the money for it. Having this mindset when purchasing goods is bad because it leads to credit card debt that you will be so far in its near impossible to pay off. As long as you are responsible with credit cards then it is a good thing to have.

Both cash and credit cards are similar in that they both are easy to carry around, and are used to pay for goods and service at the time of purchase. When making a purchase using cash, the items are paid for in full. Cash is acknowledged in every establishment such as department stores, food chains, grocery stories, as well as schools, and more. Moreover, using your money to pay monthly bills carries substantial benefits such as increasing your credit rating. When purchasing items with a credit card or cash, it permits you to pay for all your items in full. Equally, most credit cards are also widely accepted at various restaurants, universities, clothing stores, movie

Smart phones are allowing customers to shop with their phones inside stores; credit cards are accepted via phones vs. cash registers. Technology brings online shopping vs. in store shopping. And, advertising is popping up on smart phones as electronic messages as customers shop based on their location. Service is defiantly the key to keep a customer coming into a department store.

The aim is to find out the factors influencing the choice of primary credit card in accordance with Indian consumers. As per the previous literature the demographic factors are a major influencer for the selection of the credit card. It aims to find out the effect of credit card on compulsive buying and also to find out whether the income level of the individual determines the type of credit card an individual choose. It also helps to find out the impact of these factors on compulsive buying.