Credit Card Debt, Bankruptcies, What Happened? [Part 1]

Debt credit card cash advances, interest rates, loans, attachments, personal bankruptcies, where are we today and how did we get here? Not so long as if you were to borrow money for a car, a house or improvement, you must go to your bank, see the head of loans, to apply for a home loan and sharing complete with your spouse. After both of you agreed you could afford the payment to repay the loan, you need the application to the bank with the manager, a little sweat and hopefully get your loan approved. When the loan was approved, it was based on your employment, credit history, your ability to repay and you were given in good faith that the loan officer you meet face to face. Yes, believe it or not, you personally guarantee the loan, in person and that means paying the full, in time, in its entirety. To borrow money and to be approved for a loan was a privilege that you have won, not a right. Growing up in 60 years as baby boomers many of us remember this process that our parents went to buy extra things for our family. Thus we learned about the responsibility of borrowing money and power to do things now and pay for them with the money tomorrow. Most of our parents borrowed to pay for things they could afford and took a loan for not having to touch their savings accounts.

Another type of credit used in the 50's & 60's was the old "retirement plan". This has been a popular way to buy if you had no money at the time of purchase. The "retirement plan" has worked like that, let's say you want a TV that is on sale this week for $ 400 at a local shop, buy this TV today with a $ 80 deposit, which should block sale price and ensure you get that TV, store clerks who stock a TV tag in the store with your name on it. You would not take that TV until the house was paid in full. Most plans permit throwing away 60 or 90 days to repay and many people go to the store every week after having received their pay check to make another payment on the balance until it be paid in full.

Then came a new type of credit, the famous credit card. This little piece of plastic to change the world, spending patterns so as to never dreamed of and eventually eliminate the need for brick and mortar banks. Yes, this little magic card great. It fit right into your wallet, as the species, Unlike a savings book or checks. This card is the new way to buy goods in shops or pay for petrol in your car. Another name for the card has been "revolving credit", and this name was perfect because the more you charged more on credit around. Soon this will be our way to pay for most everything instead of using cash or checks and credit / debit cards would be a substitute for making small loans and loans from local banks.