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 04:59:54 · 7 answers · asked by lala_jonesy 2 in Business & Finance ➔ Investing
Maybe this site will give you some ideas
http://www.investopedia.com/articles/pf/05/041405.asp
2006-09-25 05:52:54 · answer #1 · answered by dredude52 6 · 0⤊ 0⤋
without credit cards we (as in the United States) would be in another great depression. As Americans with our inflation and how our economy is currently working. Americans make on average about a dollar less than someone who lived in 1973! Our median average income has not risen with inflation and not until now has many states raised their minimum state wage tax. For example. Federal law states minimum wage is $5.15 but a typical family in new jersey would never be able to live on that. So as of Oct 1 2006 NJ will have a minimum wage set at 7.15 an hr. Still that extremely low. 7.15 X 40 = $286 dollars a week gross. $1144 monthly 13,728 dollars a year...that's sad..where as homes in new jersey can average around 150,000 dollars. So with out credit from banks and cards America would be in a worse situation then we currently are.
2006-09-25 12:09:58 · answer #2 · answered by Dmoney25 2 · 0⤊ 1⤋
Credit cards help in boosting the overall economy, however in todays catch and spend it is putting a lot of people into debt that they cannot afford to repay, thence ruining their credit. In an overall view of this, it is also placing the burden on the creditors to try to recover the funds from the buyers who are dilenquent on their payments. So for local stores, credit is great. For those who receive it but can't pay it is bad. For those who give it is a risk that they may be leary to take without getting higher interest rates to cover bad debt risks, Hope this helps.
2006-09-25 12:07:06 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I do not know if you have heard the news that the savings rate in the U S is negative or not. That is mostly due to credit cards and home equity loans. All that borrowing has been a big boost to the economy but eventually the chickens are going to come home to roost. Eventually, consumers are going to have to stop spending so much because they are going to run out of borrowing power, and the economy will suffer greatly.
2006-09-25 12:13:14 · answer #4 · answered by Anonymous · 0⤊ 1⤋
I think that the economy has caused a lot of people to tighten up on their credit card use.
Economics 101: Credit generation, loans, other interest generating transactions drives currency increases.
2006-09-25 12:09:10 · answer #5 · answered by smoothie 5 · 0⤊ 0⤋
Credit cards boost the economy b/c people spend more freely.
Just like how loans boost the economy, can you imagine how many people would not own a home if they had to pay cash.
2006-09-25 12:04:04 · answer #6 · answered by Anonymous · 0⤊ 0⤋
spending causes debts that increase inflation, inflation causes interest hike, interest hike impects cost of products, usually up.
2006-09-29 06:18:30 · answer #7 · answered by Anonymous · 0⤊ 0⤋