The credit card is completely different to the original concept of the idea of using credit. While the original credit card was paper, this quickly developed to the plastic one that adorns many purses and wallets around the world.
The original idea behind the credit card was to pay the debt in full at the end of each month. You only became eligible for a credit card if you were a special and privileged client. Often the banks lost money on the credit card, with high fees, but this didn’t matter if it meant a customer was happy and loyal. The change in the use of the cards is apparent as customer’s now, often have balances from previous months spending.
However, slowing the evolution of the credit card took place and it was no longer a privileged accessory but one many people demanded as an easy access to some form of credit.
A credit card has become a necessity in the majority of homes; it pays for luxuries but also a way to pay for the essentials. With the companies competing for the larger slice of credit from the consumers, more and more people opted for the credit card as a way to pay for everyday life.
While improvements in the economy is a positive angel, wages have stayed comparatively low. This has led consumers to look for credit in all places and credit card companies have obliged.
What is staggering is the fact that in 2008 credit card transactions over took cash transactions in America. This is a worrying statistic in the current economic climate.
However, life has changed.More and more families are in a lot of debt due to the credit cards and rising housing costs. Consumers are struggling with the debt they are experiencing, the credit card companies are continuing to push the cards and increase the amount of debt.
Credit problems are bad that the amount on bankruptcies are increasing, meaning the credit card companies are potentially losing money through bad debt.
However, whilst this might seem that the evolution of the credit card is bad, the changes haven’t completed and there is still hope for the future.
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