Credit
"Credit is dead. Long live credit"- my take
I believe what is going on with regards to credit cards in this country is pretty scary. If you have not noticed, there have been several break-ins into major retailer's customer data. Millions of people's sensitive data have been captured by hackers.
So why is this important? Our economy in the US is a credit based economy. Most people use credit cards to make purchases and delay pay for them later. This process creates profit for the credit card people and provides access to credit for most people.
But what happens when that access is no longer desirable? What if people become panicked that their information will be attacked and sold? In my opinion, people will go back to using cash. But most Americans do not even have 2000-3000 in savings available to handle most emergencies. So this leads me to believe that they will reduce their purchases. If people reduce their purchases then the merchants make less money, credit card companies make less, and the economy starts to stall.
This is easy to understand but hard to predict as to when it could occur. I believe that early adapters have already started to not use credit cards. For the large majority to switch it will take a few more major break ins that get publicized. A break in Best Buy, Target(already done), Walmart, Apple, and several other key large stores would bring the system to a halt.
I am hoping that this will not happen. But I do believe that we are under attack from internal and external hackers that eventually will lead to the breakdown. I hope governments make it very painful for the hackers in order to deter this from happening.
Today's question is:
"What would make you stop using your credit card?"
"Credit is dead. Long live credit"- my take
I believe what is going on with regards to credit cards in this country is pretty scary. If you have not noticed, there have been several break-ins into major retailer's customer data. Millions of people's sensitive data have been captured by hackers.
So why is this important? Our economy in the US is a credit based economy. Most people use credit cards to make purchases and delay pay for them later. This process creates profit for the credit card people and provides access to credit for most people.
But what happens when that access is no longer desirable? What if people become panicked that their information will be attacked and sold? In my opinion, people will go back to using cash. But most Americans do not even have 2000-3000 in savings available to handle most emergencies. So this leads me to believe that they will reduce their purchases. If people reduce their purchases then the merchants make less money, credit card companies make less, and the economy starts to stall.
This is easy to understand but hard to predict as to when it could occur. I believe that early adapters have already started to not use credit cards. For the large majority to switch it will take a few more major break ins that get publicized. A break in Best Buy, Target(already done), Walmart, Apple, and several other key large stores would bring the system to a halt.
I am hoping that this will not happen. But I do believe that we are under attack from internal and external hackers that eventually will lead to the breakdown. I hope governments make it very painful for the hackers in order to deter this from happening.
Today's question is:
"What would make you stop using your credit card?"
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