Not the first generation of Americans lives on credit. Everything is bought on loan: appartment, vehicle, healthcare insurance. This “live on credit” is conditioned by many aspects. The determining factor is the very combination of commodity-money relations in the USA. It is structured in such a way that the average American is literally forced to use credit cards and borrow online loans in TN.
The life on credit starts right after school. The fact is that it is not habitual in the USA to live with parents for a long time. The independent life of young people begins after the prom. At first, many 18-year olds live in hostels, but with the appearance of a family, the situation changes considerably.
Buying your own home is becoming a necessity. This is a program set by parents, school and society. But, not every person is able to pay such a large sum at a time. This is where the first loan is issued.
Most often, a cash loan is taken out, because it gives the most profitable credit history, without which one cannot survive in America. Any credit history allows you to build up a certain number of bonus points. With the timely payment of all installments, the number of credit score is constantly growing and further serves as a confirmation of solvency. And this, in turn, it imposes people to issue the next loans.
Auto loan. You can buy a car without a loan only in 2 cases, either you are a fairly wealthy person, or you buy a cheap car. In other cases, you take a car on credit (or do not take it at all). Once again, auto loans in the United States are inexpensive. For example, a friend of mine last year, when he was buying an x5 for himself, handed over his almost new explorer for $ 20,000 and as a result purchase a car for $ 40,000. He took a loan for two years, for these two years he will overpay only about $ 900, i.e. approximately 2% of the total for 2 years.
Mortgages. I think everything is clear, not a single average person will be able to buy a home without a loan, especially considering the fact that Americans prefer to live in houses, and houses there cost an average of $ 200,000 – $ 400,000. Especially relevant is the purchase of their own housing by middle-aged and elderly people, those who are younger prefer to rent an appartment – this is due to the fact that there are very frequent travels for work.
Summing up all of the above, we can make a simple conclusion that Americans live on credit in order to have everything at once. Moreover, this is all and at once, as a rule, of good quality, if it is a car, then it is at least a Ford or Toyota, if it is an equipment, then it is a good large TV with a stereo system, if this is housing, then it is not an apartment of 30 meters, but usually a house in 150 square meters, or even more.
Tags: credit score, finance, loans