Credit Cards Exploiting American Consumer Essay

No, Credit Card (CC) companies are not exploiting American consumers during these difficult economic times. However, I do believe they employ different tactics or strategies as attractants, but attractants, which can be perceived by some as nefarious, are not synonymous with exploitation. Credit Cards are a good not a service. Their end goal is to generate revenue through consumer spending. The consumer is ultimately responsible for the correct usage of the card. For my argument, I will focus on the ways in which CC companies are “perceived” as exploiting consumers. Some of the perceived ways in which CC companies exploit consumers are a shift in spending culture, awareness of the disadvantages and advantages of credit cards, and the reflection of

Credit cards allow users to have a bigger spending power. The credit card gives individuals the ability to spend more than they may or may not be able to afford (Lim et al., 2014). The availability of an increased spending power is both an advantage and disadvantage. But, with all power comes increased responsibility. Again, failure to adhere to your fiscal responsibility, especially when it comes to credit cards, will result in perceived exploitation. Finally, young consumers build their social status in the process of growing up and view credit cards as a tool towards achieving this goal (Lim et al., 2014). Young consumers are spending beyond their means and then rationalizing their mistakes by claiming they’ve been exploited. In addition to consumer’s habits, the perceived exploitation is based upon consumer knowledge or financial literacy. According to Ludlum et al. (2012) “If we combine the financial literacy tools, fewer than 10% knew their interest rate, the late charges, and the over balance penalty on the credit cards they use. This showed us when we examined the financial literacy of our college students, fewer than one in ten knew these basic facts of a financial tool they have in their