One of the greatest evils of this modern generation was the advent of the Credit card. The modern credit card appeared through Diners Club, which was created partially through a merger with Dine and Sign, produced the first “general purpose” charge card, which is similar but required the entire bill to be paid with each statement; it was followed shortly thereafter by American Express and Carte Blanche. Western Union had begun issuing charge cards to its frequent customers in 1914.
Bank of America created the BankAmericard in 1958, a product which eventually evolved into the Visa system (“Chargex” also became Visa). MasterCard came to being in 1966 when a group of credit-issuing banks established MasterCharge.
Now why would I say that credit cards are evil. They are not, but here are some sobering statistics to think about:
National consumer credit debt, which accounts for 36% of the national consumer debt figure. Currently, national consumer debt is 2.04 trillion dollars (April 2004), with credit card debt equaling about 750 billion dollars.
The average family carries a balance from month to month of $8,000.00.
For every man, woman and child in the country, Americans owe $2,293.00 in credit card debt (based on current population figures).
Americans’ “national credit card debt” is equal to an average of:
$3,632.00 per cardholder
$6,400.00 per household
$8,000.00 per household with at least one credit card
The average balance on a single credit card is $8,000.00.
The average interest rate is 19%
Late fees are now $35.00
The average household has 10 credit cards.
Almost half the households in America report having difficulty paying their minimum monthly payments.
Americans paid out approximately $82 billion in interest alone last year.
The typical Minimum Monthly Payment is 90% interest and 10% principal.
Credit card debt is not the answer for things that we want now. It should be the old adage save up for what you want, because in the end it will cost you less.
Statistics provided by www.debtscape.org/debt-facts.html.
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