What would happen if everyone stopped using their credit cards and paid off their debts with cash or checks?

Question

This may seem like a silly question, but I was wondering if anything would happen with the deficit and the national debt.

Answer 1

It would play holy h**l with the banks and credit card companies, but otherwise it would free up all the interest money for direct purchases of goods and services. I think the overall effect would be neutral as far as your question goes. It would take some decent economists to give you a real answer though.

Answer 2

Consumer debt does not really directly affect trade deficit or and national debt..

However if we are talking about no credit at all, people will be forced to spend less, we will need less imported products and our trade deficit and national debt would probably go down over the time.

There are some interesting facts about consumer debts on the following site:

http://www.loanmadeeasy.org

Banks would be very unhappy if what you say happend

Answer 3

Very much so.

Basic economics - the volume of money in circulation has very definite effects. In fact it is doubtful if thee is enough cash available to pay off the credit card debts.

Answer 4

really i think the economy would crash and the bush administration would have to admit our economy is in the tank.

Answer 5

Our economic will go down, as a lot people spend their money on thing that they can't afford.
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