I remember when my mother came home with a “charga-plate” from the May Company department store. That was back in the 1950s and really was the beginning of the charge card era. Charge cards and easy credit has been a big boon for retailers of all sorts. From cars to clothes to food, we can now buy everything using that plastic card.
Newsweek’s December 6, 2010 cover is titled Money to Burn – Why Americans Can’t Stop Spending. The article contends that our spending habit and instant gratification culture will dominate our knowledge that the bill for all that spending will arrive at the end of the month.
Despite the persuasiveness of that argument there is definitely a rising tide of those who have learned that you can’t have everything you want. The Dave Ramsey radio program contends that “Cash is King and the Paid off Mortgage has replaced the BMW” as the new American idea of success. His three hour program seems to be in every part of the country from Portland, Oregon to Los Angeles, California to Nashville, Tennessee totaling over 350 outlets.
Now the “Great Recession” seems to have brought us to our senses. Most of us have lost a job or know someone who has. All of us have been alerted and frightened by that growing credit card debt. The recession now denies us, what seemed the never ending offers to apply for more credit cards and easy credit terms. Most of that has stopped. According to a Businessweek October 2008 article credit card debt had reached $950 Billion.
From Creditcards.com
- Total U.S. revolving debt (98 percent of which is made up of credit card debt): $852.6 Billion, as of March 2010 (Source: Federal Reserve’s G.19 report on consumer credit, March 2010). That is a reduction of $50 Billion a year for the past two years.
- Total U.S. consumer debt: $2.42 Trillion, as of June 2010 (Source: Federal Reserve’s G.19 report on consumer credit, August 2010)
Despite the reports of improved sales in the malls since Black Friday, I believe that our big spending days are behind us.
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