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Are Commercials Responsible for Growing Consumer Debt?

by on October 2, 2007

According to research, Americans are stowing away on a very tiny amount of the money that they earn. In fact, the research shows that Americans savings rate is about .04% of the money they earn. This means they save less than one penny for every dollar they spend. As such, they save an average of just $20 if they earn $50,000 in a year.

Now, undoubtedly, I’m a proponent of responsibly using credit cards and taking advantage of the many perks and advantages that they offer. But, I do not support going into debt irresponsibly or simply blowing off the idea of saving entirely. The simple fact is that the amount of money we’re putting away as a nation for a “rainy day” is significantly less than generations of the past. In fact, research shows that the average American was saving 11% of his or her income just 25 years ago. This is a mind blowing 275 times more than what we are saving today. Translated, this means the same person earning $50,000 per year was putting away $5,500 of the money per year or $450 per month.

Coupled with the fact that we’re growing our debt faster than ever before, this is a pretty frightening situation.  Current research shows that approximately 43% to 61% of Americans are in credit card debt.

According to one article that I recently read, the main culprit of our growing consumer credit card debt is the aggressive marketing by the credit card companies. This article maintained that the commercial advertising, in particular, actually make it seem glamorous to owe money. The commentary put down the commercials for trying to pitch the idea of using a credit card for speed and convenience.

While I agree that the commercials certainly do depict credit cards as a means of getting what you want quickly and easily, I fail to see where the credit card companies are solely responsible for this mentality. Our society has been big on getting what it wants as quickly as possible from the very beginning.  “I want it now” is an American invention and our quintessential mantra.  So, if you ask me, the credit card companies are just tapping into the mentality we’ve already got.

So, I guess it comes down to the age old debate of “which comes first, the chicken or the egg?” In my opinion, the mentality to spend big and to get what we want as easily as possible came before those commercials ever aired. And, really, who can blame the credit card companies for jumping on the bandwagon and showing how nicely they fit into the lifestyle many of us are already living.

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