This article from the New York Times is discussing how easy it is for many Americans to become in debt. Americans spent one in seven of their take-home dollars on debt payments last year, up from one in nine in 1980. People tend to get into debt so easily because few consumers are able to calculate the true costs of something. I find it easy to believe that it is so easy to be in debt because many people enjoy spending money they do not yet have. When people attempt to get out of debt, on most occasions they dig themselves a deeper hole. Credit cards also help build up debt. People feel that they can spend more money than they actually can. Credit card debt is now at over $880 billion according to the Federal Reserve Bank. Penalty fees are at $17.1 billion in 2006. Another reason for the amount of debt created by Americans, is that fees and penalties are confusing and hard to understand. People just know they are getting a credit card and that they can spend money before actually seeing it.
