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I'm in Europe. I do understand that it is bad in US, but not how it became so. It probably isn't just because of "credit" aspect of the credit cards. Even he
by bd 18y ago
I'm in Europe.
I do understand that it is bad in US, but not how it became so.
It probably isn't just because of "credit" aspect of the credit cards.
Even here people buy stuff on credit. Just it is structured in a different way - credit is bound to products, not people. For example it's popular for retailers to offer payments over longer time for more expensive items.
If this stopped to work, nothing much would happen. Few people wouldn't have large screen TVs, or leather sofas, or similar stuff.
Maybe US problem is that credit was too fluid, so that people started to use it to pay for essential things (food, rent, bills, etc)?
- noonespecial 18y agoYes that's it exactly. I've even known some people to use cash advances on their credit cards to pay their mortgages. The problem goes much deeper than that though. Many people use credit cards for all purchases and have structured their lives around not having ready access to cash even for necessities like food. The credit cards have become vital time lag buffers for cyclic pay. The real panic would occur when people realized that they were out of food, have no cash and payday is 3 weeks away. The bank that issued the credit card has folded, so it no longer works. You are hungry, and there are 200 people standing next to you in the same predicament. Many many people have no (zero) cash reserve and don't really understand why this might be a very bad thing. So I am afraid.
- bd 18y agoWow, I didn't realize it was this bad. People can be very silly. As the old saying goes: "civilization is only four meals away from anarchy". http://www.timesonline.co.uk/tol/news/uk/article492642.ece http://www.timesonline.co.uk/tol/news/uk/article492642.ece