Savings and Debt

Well my first reaction towards the article is that I already know that millions of Americans are in debt,and very bad debt to be exact. It's not that anyone I know of is in debt,it's just that every time I seem to turn on my t.v. I always see a commercial about someone being in debt and needing help to get out of it. People get into debt so easily because they usually splurge on things and run up on avoidable penalties which would cause them to get into more debt or higher interest rates. Finance charges can be dangerous now because there has been a growth of credit with low rates extending to even the least reliable risk and in 2006, the industry mailed out nearly 8 billion credit card offers, up from 3.5 billion in 2000. In this chart






















it shows how the US is declining in it's savings rate and how high it was from the 1980's to the 2000's. Americans don't save money anymore because there has been changes in federal regulations since the 1980s, along with consolidation in the banking industry and changed consumer attitudes toward borrowing and saving, which have made credit more widespread, more heavily marketed and more confusing. Also,at the same time, banks have moved from fixed interest rates to variable rates, so they can have the ability for borrowers to move their balances from one card to another, or from credit cards to lower-interest home equity loans, can have as much impact on their finances as whether they get a raise or trim household expenses. So with home values being increased and interest rates being dropped, home equity loans have enabled families to carry more debt but however to buy more things at lower cost. As you can see the US savings rate is well below those of Japan,UK,Germany, and Italy.