The long chronicle of Debt part2

Credit cards changed all that. Credit is now granted to a pre-established limit that customers can self-approve a loan at any time they wanted, to a certain amount. It was really the beginning of an unprecedented upsurge of consumer debt: as you imagine in May Without the benefit of professional guidance for each credit transaction, those most affected by "The E Factor" have their finances in the soil to excessive credit spending.

This is less regulated, as a loan was more profitable for banks because they could charge rates significantly higher, for example, 18 percent for personal loans, for example, 12 percent, while their cost of money has been exactly the same. This of course resulted in higher profit margins. Another factor lending was the cost that way. p is no longer required to pay an employee to re-evaluate each credit transaction or to counsel for the borrower. Thus, money was saved, and the process of reassessment has been selected for much larger and more profitable loans. This is only the beginning of good corporate citizenship to make room for the pursuit of higher returns.

Over time, there were more and more means of access to credit. The number of members in the credit bureau, ie: companies to grant loans grew by leaps and dogs that industry retail enjoyed the benefits of the baby boom in the most productive years of purchase.

In the 1980s a new form of credit card was emerging - the "private label" credit card. Here is an example. If you visit an electronics store - for example, Acme Electronics - May you see a demonstration of credit applications made to look like his own store. However, if you read the application, you will find Acme Electronics is not the lender. The fine print in May that Friendly Finance is the lender, even if the application and credit cards will carry all the name of Acme Electronics. Thus, the term private label, retailers felt that it was cheaper for them to secure the services of finance companies, manage their credit card programs. After all, customers have used venture capital money and the store does not have to hire people to do the administrative work. Once again, more profitable.

Credit cards really peaked in popularity in the mid 1900s with a credit program available to virtually any retail merchant who wanted one. Like credit cards MDD are gaining popularity, credit cards and bank are also growing at a phenomenal rate, the baby boom reached its peak buying years, and hell. Thus, again came to call the 1980s the decade of excess, because of all the expenditure that has taken place, much of it is used, rather than needs. All electronic toys imaginable was available to the public-ended credit programs (loans without reassessment of credit), and it leads to a frenzy of spending.

Please continue reading part 3

Other part
The long chronicle of Debt part1
The long chronicle of Debt part2
The long chronicle of Debt part3
The long chronicle of Debt part4