Abstract

The dramatic increase in the consumer debt burden and consumer bankruptcies are indications that restrictions
should be imposed on the availability of consumer unsecured loans. Financial services firms treat consumer
unsecured loans as if they are evaluating business loans. They treat the pool of loan applicants as if they are a
pool of insurance applicants Consumers on the other hand see the easy credit as an opportunity to abandon fiscal
responsibility and depend on borrowing to meet their consumption needs. The explosion of the real estate market
helped support this obsession with debt-financed consumption. This paper discusses the negative effect of
consumer debt for consumption and argues that credit card return to its original intent as a convenient means of
payment; that all non-investment consumer loans be severely restricted due to its disparaging harmful effect to
the segment of the society that can least afford it.

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