Credit Principles Past and Present

Hi,
If we thoroughly examine the way credit practices were carried out in the past, we will find solutions to many of today's credit problems. Many people who find themselves in current credit trouble are people who would not have been extended credit under past guidelines. In the past, people used unsecured loans to obtain needed goods or services. Therefore, it was worth their time and energy to go through the credit process to qualify for the loans. Very seldom were personal loans issued for such things as a trip to the mall, or a night out on the town. Credit cards are now easily obtainable, and people are enticed to spend money. Consumers are encouraged to utilize credit cards whenever possible in lieu of cash. The ease in which consumers can use their credit cards causes overspending which results in financial hardship. Some ways we can integrate past credit principles into our financial management techniques of today are:
1) Have the mindset that credit cards are personal unsecured loans and not cash.
2) Use credit for big ticket items and services.
3) Have a repayment plan in mind when making a credit card purchase.
4) The strongest credit principle from the past was that, in general, people didn't spend money they didn't have, and credit was extended carefully to people who could demonstrate that they had the ability to repay the loan.
Tomorrow we will talk about other types of unsecured personal loans.
Until then,
Alan