Since the first credit cards were issued in 1951, people rely upon their small plastic card for convenience and purchase power. Diners Club issued the first credit card used at 27 restaurants in New York. In the early 1960's, a magnetic stripe was placed on cards by San Francisco Bay Area Rapid Transit. But, it wasn't until the 1970's that the magnetic stripe on credit cards made them a viable information source.
Development of "Plastic"
Charge cards are a substitute for cash. More accurately, a charge card "temporarily" substitutes for cash. That's the defining moment when problems begin with credit card holders... easy access to purchase power with plastic rather than cold hard cash. With purchase in hand, the reality of having to "pay later" becomes less painful for "Shop Till You Drop" consumers.
Societies now rely so heavily on credit cards, it's no longer possible to be without one. Example: Those who travel frequently rely on credit cards to purchase airline tickets and rental cars. Yet, in tough economic times, more and more visible is the use of credit cards to purchase groceries, pay dental bills, car and home repair emergencies, etc. In other words, building huge credit card debt when cashflow is low.
Devil in the Details
From the moment a consumer fill out a credit application, he begins a cycle of economic instability that masks the true cost of credit card debt. Ignoring a credit card interest rate is generally the first mistake. The second is relying too heavily on a financially secure future. Lose your job or become unemployed for 30 or more days and already credit card debt becomes a choice between necessities and honoring your credit responsibilities.
The True Cost of Credit Card Debt
The true cost of credit card debt isn't only a personal issue. Abusing credit card use, multiplied by more than half of the population of any society, automatically reduces the financial stability of a country's economy. The true cost of credit card debt begins with the first signs of bankruptcy by consumers who abused their credit lines. Then, like a domino effect, banks issuing these credit cards weaken and with it national and international economies. Prices rise to compensate for credit card losses, increasing inflation. Employers must then cope with erratic cost of living pay increases for employees, draining their business of financial stability. The true cost of credit card debt? Economic shame. Shame - that uncontrollable consumerism so easily brings an entire economy to its knees.
Author Resource:-
Andrea has been writing on credit and debt for a variety of online publications for several years.
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