Credit cards are the gateway financial opiate of choice for many spenders. Banks understand that if consumers begin mistaking debt for actual wealth then this would lead to more willingness to borrow on bigger ticket items like cars and homes as the appetite for credit expands. This psychological gamble paid off multiple dividends over the decades as many real income strapped Americans started confusing housing debt, auto loans, and plastic shiny cards in the wallet as some kind of newfound wealth. Access to debt suddenly became a new definition for wealth. No other country has manic usage of debt like the United States. 1 out of 7 Americans carries over 10 credit cards. Another 1 in 7 uses at least half the balance on their credit card. How is it possible to give so much access to debt to a nation where the average per capita income rounds out at $25,000? The misguided notion that deficits do not matter that engulfed the country like a bad fad in the 1970s and 1980s largely set the stage for our current peak debt situation. Credit card debt is now fiercely contracting and the 40 year run is over.
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