Most Americans should not use credit cards Essay

Most Americans should not use credit cards - Essay Example Yet, while banks use this threat of increased risk to justify the higher interest rates, the same institutions also charge significant late fees, overdraft penalties, and debt-collection surcharges on consumers when they miss payments or go into default. These additional fees are included in the fine print of credit card agreement statements that few people bother to read or study before signing up with a bank. Consequently, credit cards can lead to significantly higher charges over time for the same retail items than if the identical goods were purchased with cash or second-hand at a discount. Because many retail purchases such as electronics, automobiles, or other appliances can lose as much as 50% of their value against new item prices when they are used, there often is no opportunity for consumers to resell goods purchased with credit for the same price as the original item. These factors combine to make credit card use personally inadvisable for most consumers, though society pr esents few options in alternative to this form of lending. Economists, financial advisors, and analysts have been warning consumers for decades about the serious consequences that the use of credit cards for purchases can have on a family budget. However, the use of credit cards can also have wider and more subtle social effects that even change the fundamental values of a culture. George Ritzer (1995), author of â€Å"The McDonaldization of Society,† described some of these issues, writing about the globalization of consumer credit card culture and its values, which leads to â€Å"†¦consumerism and indebtedness, fraud, invasion of privacy, rationalization and dehumanization, and homogenization stemming from increasing Americanization.† (Ritzer, 1995) Consumerism can be viewed as a value system which replaces traditional community symbols such as those found in religion, nationalism, and ethnic identities with a status-based symbolic hierarchy founded in displays of wealth through conspicuous consumption. In its crudest form, the person who has the most wealth has the greatest amount of power and status in a society, and this is reflected in mainstream values by the subtle distinctions made between individuals based on their manner of dress, collection of consumer gadgetry, or other symbolic displays of purchasing power. While some individuals may reject this value system in favor of more traditional or forward-thinking models, the stereotypes of consumerist behavior are repeated incessantly through popular media where advertising and entertainment are joined with a consumerist worldview that values people based upon what they buy rather than what they create or express. Critically, it can be argued that such a transition impoverishes America and the world when it is exported, in that these values are false, manipulated, and designed to fuel corporate profits for a minority of society rather than promote what is good and progressive for the greater whole of the global community. Paul Heidhues and Boton Koszegi discussed the manipulation of consumer behavior in the sale and marketing of credit cards within the larger consumerist system of values in their study â€Å"Exploiting Naivete about Self-Control in the Credit Market†. (Heidhues and Koszegi, 2010) These researchers argue that the cultural programming of individuals to seek â€Å"