Reliance on Credit Cards

Reliance on Credit Cards

教 师       战双鹃        

学 院      建筑学院       

专 业       建筑学        

年 级        14级        

姓 名        叶宇鹏       

学 号     201435121104    

2016 年12 月 3 日

Reliance on Credit Cards

Introduction

 This article first was introduced the status of credit cards in the United States. Then it also introduced the history of American credit cards. Credit card is a payment tool of commercial bank or non-bank financial organization provides functions like consuming a letter loan to its customer, transferring balance of accounts and depositing and paying cash and so on. Consumer credit is the basic function of credit card what followed closely was the introducing of the advantages and the disadvantages of credit cards.

On the one hand, credit card gives people a large amount of money to spend ahead. When people have a lot of money at hand, they will have the strong desire to spend and buy what they want. Some people can’t control themselves. Credit card brings people the sense of satisfaction. On the other hand, credit card makes people burden a lot of money. When people spend the money ahead, it means that they need to return it. Some people become the slave of credit card; they need to pay off part of the money every month. They don’t earn much, but they need to take out some part of the salary to pay off the debt. Every coin has two sides. Credit card brings people pleasure, at the same time, if people use it in the improper way, they can be the slave.

Credit card is the product of civilization, it brings convenience while with tempt, we should take a measure when we use it.

Status of credit cards in the United States

In the United States, the use of credit cards is becoming more and more convenient, more and more popular. From everyday shopping, travelling to the restaurant bill, people can pay their bill on a credit card. In the past, people will hold a credit card as a status sign. Nowadays because of market competition, even unemployed college students can be an owner of a credit card. It can be widely distributed and maintain popular due to its two major characteristics, "convenience" and "credit." Card issuers in order to attract customers and widely distributed without affecting their financial position, tend to set a variety of obligations to remind the cardholders that a grand don't come for free.

According to a study in 2012, while most Americans pay their bills on time, many Americans still rely on credit card spending. And as family assets decrease and the coverage of basic medical insurance was reduced, some of Americans can no longer receive benefits for the long-term unemployment, and even middle-class families were beset with a crisis in credit cards debt.

A survey conducted by a non-profit organization shows that 40% of low-income families and middle-income families rely on credit cards to pay the bill of most basic needs of life, such as rent or mortgages, groceries, utility bills, or insurance. Among households with annual incomes of less than $ 50,000, the ones using credit cards to pay increased to 45%.

These debts are not for a brand new TV set or a trip to an exotic vacation. Two of the main culprits are unemployment and medical expenses. Over the past year, 86% of Americans having credit card debts continue to pay for their basic living expenses with credit cards because of unemployment which could make things get worse. The New York Times described how the unemployment benefits programs of Congressional reorganization get Americans who were unemployed for more than six months into a short-term crisis. For some of the long-term unemployed, it is a more difficult time for them to re-enter the labor market. At present, they are also more difficult to receive long-term unemployment benefits. Many families struggling with long-term unemployment will increasingly rely on credit cards and loans to ease the cash crunch situation. However, such measures will only put them in a long-term debt cycle.

The history of American credit cards

The American established the largest and the most powerful card industry in the world credit with the most perfect system. The United States has so many rights to ensure that the US is the world's most developed countries on credit card industry. The United States maintain their dominance of the global credit card industrial development for a long time.

 (1) The origin

The world's first credit card in the United States was born 1915. In this period, the credit card is essentially working as the form of credit and privilege. And they could only be used within the specially appointed firm.，which made narrow range of use.

(2)  The ordinary card stage in the form of bank credit

 Since Franklin National Bank in United States California issued the first bank credit card in 1952, the banks have followed suit and entered the ranks of issuers. At this stage, the bank card is no longer a tool of commercial credit, and become a kind of payment tool. It not only could pay directly on them, but also can be used to access cash in the bank, and handle the settlement. There are debit cards and credit cards in the varieties, which the commercial sales card could not compare with.

 (3) The Trust-card stage 

In the second half of this century, with the emergence of‘non-border’in international trade, the tourism grew tremendous .The credit card business of each country was also becoming more and more prosperous，and developing toward the internationalize direction. The four major credit card group containing VISA、MASTER、AMERICAN EXPRESS and DINERS, which originated in the United States, is not only control the US credit card market, and has developed into an international credit card-trust.

（4) The  creative development stage

Some of companies decide to cooperate to launch sales promotion. For example , MASTERCARD ,NWA, STARWOOD、CCL and GLOBALONEO worked together in 1999 April to launch "Aleya" service. Tourists could pay the bill of shopping, taking the airline plane, living in hotels, cruise tours, calling on a MasterCard. Besides, On-line credit card business was developing in depth. The chip credit cards are with high security and high performance. They can effectively achieve the functions like identity authentication, digital signature, online payment, database authorization and Consumption integral. They could also effectively reduce the risk of transmission and transaction, including the risk of transaction fraud.