how has the economy play a role when it comes to people and credit cards. or better yet, how has credit cards effect the ecomony.
2006-09-25 04:59:06 · 7 answers · asked by lala_jonesy 2 in Arts & Humanities ➔ Philosophy
u use credit cards just like money... that you dont have. its like an iou for the bank. u pay for merchandise with the banks money using the credit card and then u pay the bank back. sooooo when u spend too much of the banks money... and u have trouble payin the bank back... thats how it effects our economy
2006-09-25 05:08:17 · answer #1 · answered by demoniclilangel_666 2 · 0⤊ 0⤋
hmm..it allows people to buy more things they Want, therefore affecting supply and demand (ie, the more demand there is for a product, the more supply will come in). incurring debt is actually the whole point of capitalism; u spend spend spend, and pay it back. the problem comes in when people buy things they can't afford, and become bankrupt. which is why credit cards can be bad for People, but not necessarily the Economy. they get their money back most of the time; they send u to collections; they hold ur house or car in forclosure. since there is always supply and demand for houses, cars, etc, there is no lack of payment from Somewhere, whether it is from you or someone who ends up buying your bankrupt property. therefore, credit cards are like monies being circulated into the economy; money going in, goods coming out. think about what happens to interest rates when the FED raises or lowers the money supply. :)
2006-09-25 12:25:06 · answer #2 · answered by sasmallworld 6 · 1⤊ 0⤋
When interest rates are low and credit is easily available people use it more. Likewise, in a strapped economy (when interest rates are likely to be low to encourage access to dollars) people use credit more because of less access to cash. As rates go up and money becomes more "expensive", the debt people incurred with credit cards becomes more costly, pushing them down further and placing a greater strain on the consumer economy.
2006-09-25 12:09:43 · answer #3 · answered by Akkakk the befuddled 5 · 0⤊ 0⤋
Credit cards are a vehicle and don't really affect the economy directly like interest rates, oil prices, Consumer Price Index or Unemployment rate.
2006-09-25 12:15:20 · answer #4 · answered by Anonymous · 0⤊ 0⤋
people use them in place of cash thereby digging themselves a hole of debt which if not kept in check can drive people to bankruptcy, which in turn places a burden on the company which gave the credit in the first place. End result everyone pays a little higher interest rate to compensate for all the bankruptcies
2006-09-25 12:09:23 · answer #5 · answered by eric g 3 · 0⤊ 0⤋
it was actually only all about the convenience of not having to carry around all the cash you may need. then they improved it, allowing you to pay for stuff at a later date.
it allows people to buy more things sooner. now for sales businesses and banking, that is gooooood..
still further, people now flaunt credit cards (the super unlimited credit cards) as status symbols: hi guys, i just got this silver diamond blah card.. nah, my wife got me this triple gold leaf blah card.. that's nothing compared to my .. get the pic.
2006-09-25 12:11:01 · answer #6 · answered by doe 3 · 0⤊ 0⤋
They jepordize the economy!
2006-09-25 12:22:29 · answer #7 · answered by citizen ex 2 · 0⤊ 0⤋