debts and bank accounts for individuals

Many people nowadays are deep in debt and have either declared bankruptcy or are about to do so. Such a terrible situation results when people use their credit cards with little regard to their ability to pay back the money and use them to make petty purchases instead of using cash and thus unnecessarily accumulate debt in the form of interest payments. To deal with this problem, a measured response is needed, one that reduces the chances of people getting into such trouble without making it too hard for people to get loans that could be truly beneficial. Many credit card companies extend loans to people who should not be given such loan facilities. The reason is often to make more money without sufficient concern for the risk involved. The incentive can be great since these companies get interest payments and other fees that can be quite high, possibly from both buyers and sellers when a credit card transaction is executed. Another cause for the problem of debt is the huge pressure on consumers to get the latest of everything, with consumerism being promoted as an essential element of economic growth and with many societies awarding disproportionate value and regard to material possessions and judging people’s worth by them. Many young people are also quite ignorant of the serious consequences they can face if they are unable to repay their loans. They do not fully understand how this can affect their ability to get critical future loans, such as a mortgage loan, a student loan or a business loan, and how damaging that can be to their future social life and career. This situation can become an epidemic that threatens the whole social fabric and economic development of a country. As such, it needs to be addressed effectively. Credit card companies should set appropriately strict policies that govern who gets a credit card and what the credit limit on that card should be. In addition, they should coordinate to make sure individuals do not get too many credit cards from different providers, a compounding factor for this problem. Government should also play a role by setting standards for the issuance of credit cards and by monitoring the work of credit card institutions to prevent greed from taking over and wreaking economic havoc. It should also take preemptive steps, such as running a consumer counseling and protection office that gives people advice on credit card proper use and on credit risk management. In addition, it should make sure schools educate students on the problems associated with improper use of credit cards from an early age since such preemptive awareness can go a long way in preventing this problem. The combined efforts of credit card companies and government can thus complement each other. However, the policies set should not be too strict. No one can really guarantee payment of credit card debt since it is impossible to predict the future with absolute certainty. Requiring such assurance before issuing a credit card would, therefore, be unrealistic. In addition, consumers need to be able to have the flexibility to purchase much needed items now and pay later. If a person gets a job offer but needs a car to get to work, for instance, he or she should be able to buy a car now and make installment payments over time. In addition, having debt to pay can make some people work harder and focus their efforts to repay their debt. Thus, people’s productivity and quality of life could be severely affected if they are unnecessarily prevented from acquiring credit cards. In conclusion, credit card issuance must be more tightly regulated to prevent their clear misuse that is becoming a national problem in many countries. However, the policies set should not be too restrictive because that could greatly inconvenience people and hurt their productivity and the economy at large.