Complete 1 page APA formatted essay: Macroeconomics (credit card impact).Going by this definition of money, it is evident that credit cards do not qualify as money.However, credit cards are still a co
Complete 1 page APA formatted essay: Macroeconomics (credit card impact).
Going by this definition of money, it is evident that credit cards do not qualify as money.
However, credit cards are still a common mode of purchase among the citizens because of three main reasons. Credit cards offer a simplified method of purchase for consumers, since they do not have to carry hard cash (Zandi and Singh, 2010). The second reason is that credit cards offer a quick method out of emergencies, since individuals do not have to travel long distances to find cash (Zandi and Singh, 2010). The credit cards benefits that come along with the use of the card is also an advantage, since most credit facilities expect an interest charge, so they offer incentives (Zandi and Singh, 2010).
According to Debt Resources (2012), the main impact of credit cards on the economy is the increase in debts in the economy, since many people accrue interest payments that they cannot afford to pay. Many of the debts that are accrued to credit cards end up being written off as bad debts, which reduces the credit history of most consumers in the market. This reduces the spending power of consumers, since they have to allocate their earnings to paying off debts, which in turn reduces the economic growth of a