The Dangers of the Credit Card

Paper Summary:

The paper relates that the credit card is responsible for the deterioration of the family's ability to manage their finances in an acceptable manner. The author validates the hypothesis that as consumers continue to incorporate credit card spending into their cultural practices, the economic impact will be the dissolution of one's economic buying power and stability. The paper researches whether additional financial education and training at the secondary level will help curb spending and the current acceptance of debt payment and debt equity as a norm of society.

Outline:
Abstract
Introduction
Literature Review
Method
Analysis
Conclusion

From the Paper:

"There is mounting evidence that the United States has become what many refer to as a "credit card nation" (Manning, 2000, p. 3), one dependent on debtor financing as an accepted and oft used form of payment among the wealthy and poor alike. The use of credit as a form of payment serves may purposes, including increasing the social status of independent users and providing users the opportunity to access services and commodities they may not otherwise have the opportunity to enjoy (Klein, 1999). Along with this opportunity however, also comes a financial obligation, one many consumers fail to recognize when they accept credit card financing as a primary vehicle for achievement and success (Klein, 1999)."

Sample of Sources Used:

• Chakravorti, S. & Emmons, W.R. (2003). Who pays for credit cards? Journal of Consumer Affairs, 37(2): 208.
• Food Marketing Institute. (2000). It all adds up: An activity based cost study of retail payments. Washington, DC: Food Marketing Institute.
• Hester, D. (1972). Monetary policy in the "Checkless" economy. Journal of Finance, 27(5): 270-293.
• Humphrey, D.B., & Berger, A.N. (1990). "Market failure and resource use: Economic incentives to use different payment instruments". In, The U.S. Payment System: Efficiency, risk and the role of the federal reserve, Boston: Kluwer Academic Publishers.
• Klein, L. (1999). It's in the cards: Consumer credit and the American Experience. Westport: Praeger

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