What is consumer debt? Are you a victim of it? How to tell if you are heading into consumer debt....

Consumer debt is credit taken out by the consumer to purchase a good or service that they could otherwise not pay on their own. Consumer debt is more common in western countries, because in Asian countries it is viewed as a taboo to have personal debt. The more common reason to have personal debt is for housing and schooling.

The permanent income hypothesis says that consumers are likely to take out finances for these goods, knowing that later in life they will have the means to pay them back during a higher earning timeframe. Within the US and UK consumer debt has increased in terms of credit card debt. With a credit card a consumer can easily purchase a product that they would not normally buy if they relied on the money in their pockets. Credits cards are used as a form of convenience in paying for things. Credit cards do not help consumers overcome the consumer debt they have created.