Illustration Essay -1 Essay, Research Paper

Our nation is in dire financial straits. However, the nation’s situation is only a reflection of our personal failures in our inability to “Just Say No” to ourselves. We must have everything and we must have everything now. We have become a country of consumers instead of a populace of producers. Let’s face it, too many families are drowning in debt.

We are spoiled. No one wants to wait and save money for purchases. The American consumer is deeply in debt and not talking about it. Consumer debt rose two-hundred twenty five percent from 1976 to 1986. Visa billings doubled last year from two-hundred billion to four-hundred billion. Total household debt has soared to 93% of annual income.

USA Today has reported that for the last five years, finances have been the number one subject of most New Year’s Resolutions. It used to be weight. Something is definitely amiss.

These statistics have been building for years but it is no longer just the baby-boomers problem. My generation just embarked down the same ruinous path. Many students come out of school not knowing how to balance a checkbook. College is where you start learning firsthand about finances and credit because the credit companies are sending out cards by the buckets to students.

Citicorp just spent ten-million marketing credit cards to high-school kids. Sixty-one percent of all college students are carrying a card, and thirty-two percent of those got it before college. However a recent survey showed that fewer than thirty percent of the students polled could say what interest rate they were paying on their cards. It’s like not knowing anything about guns and toting an Uzi. But the credit card companies understand about teaching children habits that will carry over into adulthood.

Now credit cards aren’t the root of all evil, but we must look at it realistically. The typical family

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is holding between eight and twelve credit cards, and each card has an average balance of $1500. These were accumulated by no more logic than just who sent them one. They are horrible and dangerous financial tools. There are over forty-three million Discover cards, over twenty-six million Sears cards with more than seven hundred thousand applications per month. In 1994 Sears made more money on credit cards than they did on the sale of merchandise. So Sears is not a merchandiser; it is a credit operation with some stuff out front.

What exactly can the irresponsible overuse of credit bring about? Worst case scenario; how does bankruptcy sound? Typically bankruptcy filings are over nine-hundred thousand, annually with a new record set every year between the years of 1983 and 1992. The increase of filings in the last fifteen years is over one-hundred fifty percent, with ninety-four percent of filings non-business personal filings. Think you’re not in danger of this situation? Here’s something to think about. A recent study done on the typical bankruptcy by the University of Texas in conjunction with The University of Pennsylvania confirms this. Published in the Wall Street Journal the study noted that the typical bankruptcy was not a guy under a bridge or a real estate high roller but rather “Well educated, middle-class baby boomers with big time credit card debt.” Wake up America!