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Why US is Consumer Debt Ridden?

US is well known as one of the biggest creditors, as well as debtors in the world.

Although US helps funding other countries, especially developing countries, it own people is debt ridden.

Why such a contrast? In my opinion, culture and opportunities are the main culprit.

Taking consumer debts, especially with the ever-present of very interesting credit cards offer has been a trend, if not a culture in every American life.

Credit card, a major part of the cashless society movement, offers convenience to its holder. It’s unbelievable today if we know someone without having at least one plastic in one’s wallet.

Nothing wrong with the credit card – it’s the holder that cause the problems

Credit cards are basically useful and convenient. You don’t have to carry cash with you, bringing convenience in your daily life, as well as minimising the risk of, say, pick pocketing.

With low interest cards being offered these days, with additional perks, such as 0 APR or interest free period for a limited time, consumers are attracted to sign for one.

No matter how much information on credit cards benefit available, the debt-ridden US today is suffering simply due to the nature of human being – spend what they see, and spend even more what they don’t see.

For example, if you had a $100 in your wallet, you have the tendency to spend it recklessly when you go to the supermarket. This ‘genetic’ problem is amplified by the availability of credit cards. Suppose you were given a limit, say $500. You will always have the tendency to spend more than you should, because you don’t ‘see’ the money you have in your pocket. This is amplified by the sense of ‘you-can-pay-the-bill-later’.

Credit cards can actually deliver you from debt

Here’s a good news for responsible and well informed credit card holders – you can actually clear your debt with the help of credit cards, as well as helping you raise your credit score.

Clearing debts – Using credit cards smart and cautiously will allow you to have 30-day interest free loan. The key is to pay your bills before it’s due, and pay them in full.

Raising credit score – Choose reputable credit card issuers, and use your plastics as usual. The key is never pays your bills late. Do this regularly will give you a ‘shining’ report.

Choose your credit cards wisely, and they will help you in your personal finance.

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