boring essay on Why do you think so many people run up excessive debt and why do you think it has become socially acceptable to be in debt? What should be done to address the issue?

Why do you think so many people run up excessive debt and why do you think it has become socially acceptable to be in debt?  What should be done to address the issue?

There are two main categories of debt.  They are called consumer debt (which is also known as personal debt) and investments (such as mortgages).  Consumer debt is basically a debt that is built up from people purchasing items.  Consumer debt is what this essay will focus on, exploring people’s views and why so many people are in consumer debt, social acceptance of debt, and possible solutions.

The amount of people in consumer debt is rising especially in the United States and the United Kingdom.  Consumer debt is caused by problems like credit cards, payday loans and consumer finance (e.g. hire purchase and other loans).  All of these types have high interest rates.  There are lots of reasons as to why lots of people may find themselves in debt.

Banks and other moneylenders provide easy access to overdrafts, loans, credit cards and other borrowing services.  They allow others to get into high interest rates rather than secured loans (e.g. mortgages) therefore starting to get higher in debt.  Also people are pressured by advertising industries demanding that the only possibility is to spend rather than save their money and invest in it.  We know it’s a big industry as the United States spent $144.32 billion on advertising in 2005. Averts trick people into buying their products and get them pay by credit card.  Companies like DFS have advertised offers like “ nothing to pay for the first year” this is one of advertisings tricks.

Why so many people are in debt may also be explained by the fact that being in debt is socially acceptable.  In some countries like Japan and China they still do see credit card debt as almost unknown, like people saw it earlier, as there still remains the longstanding bias against consumer debt.  However in this country and other western countries it is viewed as acceptable but people still are conflicting views.

 For example many people would argue that taking out a student loan to attend university is forced upon them, governments no longer pay for tuition fees people may feel that they have no other choice.  Others may view a student loan as an investment, taking a loan to pay the fees for a higher salary once graduated.  Even though these views vary the general agreement is that student loans are an acceptable form of borrowing and therefore are an acceptable form of debt.  There are conflicting views towards consumer debt and even between the types of consumer debt, but the over riding standpoint is that consumer debt is far more socially acceptable than ever before and appears to be even increasing.


Consumer debt is a significant problem in today’s society; debt ruins people’s lives.  Far more people are declaring bankruptcy.  Some people need to be careful with borrowing as it may have disastrous costs if they’re not careful. Many people get in ‘too deep’ in borrowing and find they are borrowing more and more money to pay off what was previously owed and repeat this.  If people cannot keep up with repayments and find they have run out of credit or borrowing options they may loose their homes and other personal possessions. 

The financial services authority (FSA) has started to bring in new ideas to help prevent personal debt, starting on education. They have introduced a new programme in schools that will help children have a better understanding of all the terminology banks and other moneylenders use.  They have spent 10 million pounds on this project to make sure children learn the importance of some financial management and what the consequences are of borrowing (e.g. if someone borrows a loan they will find themselves having to pay back around double that amount due to interest).

I have noticed that they have started to prevent debt but have not done this soon enough due to people in today society being in major debt.  They have noticed that something does need to happen so that in the future people will not get into this situation but the issue is far from solved.  I think that if they want to solve this problem they need to put in more education and give free financial advice so that in future this won’t happen.  Banks and companies should take into consideration the way they deal with all their customers to help prevent debt problems.  The individual has responsibility for managing their finances and we cant blame it all on banks and advertising.  We must think about the consequences of our actions.

by Josie Bonnici, start of yr9

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An essay where we were given the question Why do you think so many people run up excessive debt and why do you think it has become socially acceptable to be in debt? What should be done to address the issue?