Random Thoughts

A symptom of the modern economic miracle has been the proliferation of people reliant on cash advances for living their everyday lives. In this modern materialistic era, it would seem that social status is linked to material possessions, if all other things such as wealth and education are equal. This ideology has caused rampant consumer materialism, with the focus on getting everything here and now. Unfortunately the average consumer cannot support this lifestyle on his income, but with the material ideology reinforced every minute by the relentless marketing and advertising, his desire to ‘buy’ is never allowed to dampen.

Seeing a potential market worth billions, Banks jumped at the opportunity, issuing credit cards in their millions which allow cash advances from ATM’s dotted around most cities. The Banks have realized that the common consumer is willing to pay a portion of his future wealth, as an extra cost for having what he wants now. Hence cash advances became for Banks, a very profitable business, with some companies existing purely on cash advance, interest and fee basis, such as Capital One.

The proliferation of these very credit cards in a way started the economic boom that would last from early 2002 to late 2007. Consumers became used to the idea of buying now and paying it off later. The resultant spending spree meant that companies were making record profits as demand for everything soared, resulting in unprecedented increases in the production of material goods.

However living on multiple cash advances as a lifestyle means that sooner or later, the repayment catches up to you. Eventually its is the same income that has to support paying back all those credit and charge cards; where a slight change in interest rates could cause a substantial increase in the costs. As the modern consumer has lately realized to his detriment, it is not a sustainable lifestyle.