America: life on credit

Фото: Depositphotos

When you say “American”, as a rule, the following picture arises in the imagination of many: a person with a wide smile, wearing not-very-sophisticated, but clean and good-quality clothes gets into a new car and drives to his own house on the outskirts of the city.

But many do not think that Americans buy most of these benefits on credit. It is unlikely that you will find an average American who is not in debt. Even those who do not have credit card debts or pay all obligations in good faith on a monthly basis probably have a mortgage on a house or car.

The Federal Reserve annually publishes data on American credit card debt. According to the results of 2016, the total amount of consumer debt was 935 600 000 000 dollars. Since 2011, according to the agency BloombergThis amount has increased by 100 000 000 000 dollars.

According to financial experts, one of the reasons why Americans are so indebted is the high availability of credit.

When someone offers you a loan, it's hard to say no. An existing loan, experts say, is the driving force behind the accumulation of debt in both the short and long term. Partly dependence on credit cards can be explained by their availability, you can have several, and you can accumulate debt on each of them.

Only 35% of credit card holders do not have a balance by paying their financial obligations on the cards every month. Such consumers use credit cards for convenience and, perhaps, for receiving various bonuses, such as miles per flight, and not because they need loans.

But more and more credit card holders are taking up because they simply do not have enough wages to pay all their bills in full, so they accumulate arrears.

Credit addiction in many cases begins at a young age, when you need to borrow money to pay for education - take out a so-called “student loan”. Since higher education in the United States is not free, but on the contrary, very expensive, students whose parents cannot afford to pay for tuition take out a loan.

In addition, young people want to dress well, go to restaurants and have fun, but there is no money. And in this case, of course, a credit card will come in handy, as it allows you to spend more than you earn. As a result, young people are hooked—often so hooked that some take forty years or more to pay off credit card debt and student loans.

Debt like this is one of the reasons why Americans get married and have children so late. They cannot take on additional, primarily financial, responsibility for the family, and living with their parents is not accepted in the United States. Those who do get married and have children immediately find themselves in a new financial dependence, this time on insurance companies, bank mortgages and loans to pay for their children’s education.

So everything continues to move in a whirlpool. Therefore, the next time you meet an American, remember that you, with your probably not very luxurious income, if you count all your debts and credit obligations, you can be richer than him.

The original column is published on the website of the Ukrainian service.VOA".

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