Consumer Credit Info You Need to Know

If you think you can ignore consumer credit information, you are not seeing the way credit markets affect you every day. Consumer credit means more than just your credit card interest rate. The ability for consumers, large and small, to access loans and debt affects the entire health of the global economy.

Businesses Rely on Debt

Most businesses run on a cycle of debt. They take loans to expand and use credit to make necessary purchases in between sales. Retailers are notorious for going into debt for an entire year prior to "black Friday" on the Thanksgiving weekend, when holiday sales push them into the black. When lenders are not offering money, these companies, and others, quickly fail. A high amount of business failure can spiral into recession.

You Rely on Debt

Most large consumer purchases are made with debt. Homes and autos are the most recognized forms of large debt, but credit cards and lines of credit provide basic purchasing power to people every day. Just like businesses, most homes rely on debt cycles to pay for college tuition, vacations, back to school clothes and emergency purchases. When banks are not issuing credit, daily consumption significantly drops. This drop in consumption again leads to business failure and possible recession.