finance

There seems to be a type of people who live on credit. They buy the latest items like the newest model cars, tv' s etc and do not care if they are not able to afford the items. They would just charge it to their cards or take out a new loan. This was not common in India in the 70's . But with the advent of liberalisation and entry of foreign banks, this type of people are becoming common in india, especially among those in the IT field.
Till the recent recession in the USA and the corresponding slowdown in India, banks were competing with each other in issuing credit cards. Some people would just use a credit card to waste money on the latest and costliest stuff and would then just go about paying the minimum possible on their credit card debt per month.Some people do not even understand that even a single mistake on their part or a late/ missed payment might sometimes just blow up the interest rates on their credit card debt. They sometimes fail to understand that there is no such thing as a free lunch with regard to credit card companies.
Some of the younger generation seem to have forgotten the value of frugality and the concept of living within their means.
When you use credit cards , you do not have the same feeling / care as when you count out currency notes. Also some credit card companies entice you with offers of cash back offers, free gifts etc if you buy a lot of items using your credit card. All of this sometimes leads to overspending.

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beware of student education loans

In India, as education for medical and engineering studies are becoming more and more costly, particularly in private colleges, it is common for students to take out education loans.

Most of the students might be taking on these loans in the hope of landing jobs with high wages as soon as they graduate. But they have to remember that many things can happen in the duration of a 4 to 5 year course. If for some reason, the student has some arrear papers by the time he finishes the course, or if the job market for that particular branch of study is not very strong , the student will find it very hard to find a job to support himself and pay off the student loan (some loans might have a 1 year or so grace period after the course duration before repayment starts. ). Even an average student will only start at an entry level position in his job ladder and will take many years before he might have enough experience to get the high wages that he might have dreamt of as a student.

So before you take out huge loans, read and do research about the interest rates(fixed/floating etc) , repayment details, relative chance of jobs in fields related to current education, aptitude of the student in the chosen field of study etc

slowing of global economic growth

The whole scene of global economic growth might be slowing down considerably due to the credit crunch leading to loss of jobs, and loss of demand for manufactured items. This might lead to severe slowdown of some of the drivers of growth in the last few years like the chinese economy are highly dependent on export to the USA.

Most americans have been living far beyond their means and may be deep in debt, and the slowing down may lead to lower earnings, smaller paycheques, slump in home equity and tightening of spending if they are wise.

The figures at the retailers seem to indicate a slowdown in consumption


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