Consumer Debt

Consumer debt is consumer credit which is outstanding. Some consider all debt incurred for anything else other than investments is unwise, while others believe that consumer credit is beneficial in growing the economy. The most common form of consumer debt in industrialized nations are credit cards, payday loans, and unsecured lines of credit, often at higher than average interest rates.

Consumer Debt

Consumer debt is consumer credit which is outstanding. Some consider all debt incurred for anything else other than investments is unwise, while others believe that consumer credit is beneficial in growing the economy. The most common form of consumer debt in industrialized nations are credit cards, payday loans, and unsecured lines of credit, often at higher than average interest rates.

Long-term consumer debt is often considered fiscally suboptimal. While some consumer items (automobiles, which are usually exempted in discussions of "consumer debt", and business suits) may be useful investments that justify debt, most consumer goods are not. For example, the expenditure in getting a big-screen television now (and thus incur high-interest consumer debt) rather than saving for it is usually not justified (in strict financial terms) by the subjective benefits of having the television early.

An alternative analysis might view consumer debt as a way to increase domestic production. If credit is easily available, the increased demand for consumer goods should cause an increase of overall domestic production.

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