America’s debt problem is large and wide spread. It can’t really be traced back to a singular event, individual, or company. Rather, a number of problems have built up over the years and brought us to where we are today – drowning in debt.
First, credit card companies have been preying on hardworking and sometimes naive Americans for many years now. Think back to the first time you were solicited by mail for a credit card. Did you understand how one worked? Did you read that terms of service card that was printed in 4 point font?
If you’re in your thirties like me, you were probably solicited when you were in college. In college, I had little-to-no understanding how a credit card worked, what an interest rate was, an APR, a minimum payment, etc. These were all new concepts. I’m sure I’m not alone in this.
Nevertheless, I was “already approved!” by countless companies for thousands of dollars worth of credit. Was I worthy of that credit? Who knows. It didn’t (and doesn’t) matter to the credit card companies. All they want is for you to start racking up debt. And hopefully before your parents back home find out you have a credit card.
The same is true in low income areas. Like the subprime mortgage crisis, banks love to prey on people who don’t fully understand what they are signing up for. Many low income families accrued thousands of dollars of debt before they even realized how much it would affect their lives.
Sure, it’s easy to blame the low income individuals and green, naive college students and say, “Well, it’s there fault. Let them sort it out.” But that is a rather selfish, unbrotherly view. The fact is, many of these people are being taken advance of. Is it ok for someone to swindle a senior citizen into ordering something they clearly don’t need. Of course not. Well this is essentially the same thing.
All that said, people bear half the responsibility as well. They need to begin to educate themselves about credit and credit cards. I think it’s quite unfortunate that a basic class of some kind isn’t taught in schools. This class could cover credit cards, car payments, mortgages, etc. The only way we begin to learn about these things is by asking our parents or weeding through the internet. What if you are not fortunate to have your parents around or access to the internet? How would you ever learn what an ARM is or how amortization works?
If we start educating the youth earlier on about the importance of keeping debt to a minimum, perhaps the debt problem in this country will begin to improve. We certainly can’t look to the credit card companies for help. It’s in their interest to keep America drowning in debt.