Most of us know how easy it is to get credit today. We’ve all heard the stories from various news outlets stating how the family dog or one-year old receives a credit card application – only to be approved when tested by families. Frankly, the majority of credit card companies don’t spend the time to make sure their customers credit information is valid. This type of availability is most likely the cause for the steady rise of bankruptcy in America.
Once a credit card is approved and sent to the consumer – it’s a piece of cake for the borrower to use it as free money to purchase household goods or buy things they normally wouldn’t think of. The majority of new applicants typically start spending beyond their income the instant the card becomes activated. It appears for all intents and purposes that the borrower can now buy anything they’ve ever wanted with only one quick signature on a form.
Once consumers start using their cards, the bills that start mounting at the end of the month may come as a surprise. Even though consumers are now allowed to borrow credit that exceeds their salaries, or even that their credit reports are showing accounts in good standing, the credit companies issuing these cards should not be relied upon with debt relief once the consumer reaches a massive debt load. In the past, credit cards were much more difficult to obtain since the companies themselves did rigorous credit checks and were stringent on approvals. Further, bankruptcies were far less socially acceptable than they are today. It may not seem like it today, but credit has never come so easy.
Realistically, there are not many reasons why the average American cannot qualify for a MasterCard or Visa from a variety of lenders which explains why credit cards are so intensely popular. If a consumer can pass off any amount as income and has a valid social security number, they will qualify for any number of credit cards – and watch how fast they’re used! Credit cards no longer designate a person as being a holder of good credit. The rise of this astonishing economy in no way means that Americans are suddenly financially stable, it just means that the credit companies are smarter in getting people into a routine to owe money they can’t immediately repay.
This routine is in no way healthy, though. Even for borrowers who intend to pay back their balances at the end of the month, the temptation to spend more than they can handle is usually more than they can reasonably take on. However, once they’re accustomed to the lifestyle of paying minimum balances, borrowers with little discipline will find themselves in a deeper hole than they can imagine.
