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Americans’ Reliance on Credit Leads Many Into Debt

The ease with which Americans can make purchases using credit cards and loans has led to increased personal debt. Jeffrey Brown speaks with Stuart Vyse, author of "Going Broke: Why Americans Can't Hold On To Their Money," about the roots of the country's financial troubles.

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  • JEFFREY BROWN:

    It's often said that much of this country's economic growth in the last decade and more has been fueled by consumer spending, but that spending came with its own problem: ever-rising personal debt.

    Overall consumer debt is up more than 20 percent since 2000. Today, the average American has more than $16,000 in debt, excluding mortgages. All this is the subject of a recent book, "Going Broke: Why Americans Can't Hold On to Their Money."

    Author Stuart Vyse, a professor of psychology at Connecticut College, joins us now.

    Well, let's start with an overview. What happened to cause so many Americans to rack up large debts?

  • STUART VYSE, author:

    Well, we must start, of course, with the availability of credit. In the '70s, credit cards became much more widely available, much more profitable for the banks, and pretty much anyone who wants credit can get it nowadays.

    It's tightening up slightly at the moment. But for a long time, more credit than you could use has been available to people who wanted it.

    But in addition, the marketplace has come into our lives in a way that I think we really never anticipated. It used to be the case that, when you went home at night, you were not in the marketplace. You were just a person at home living with your family and you didn't have to think about economic decisions, about buying things.

    Now we can buy things any time we're awake, at home, and we can act impulsively. And, of course, we have the wherewithal in the form of credit cards in order to make any purchase or many purchases possible.

  • JEFFREY BROWN:

    So the ubiquity of temptation, in a way. It never — it's around all the time. Has that changed the psychology of spending and of taking on debt?

  • STUART VYSE:

    Absolutely. It was the case that in the past, when you were home, you didn't have to worry about these things. You could plan to make a purchase later on in the future, but it was something that didn't gnaw at you all the time and you couldn't act impulsively.

    Now we have to take on the responsibility of not buying all the time that we are awake, in many settings where we didn't have to before. And the temptation is tremendous.

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