I offer no comment on the differentiation between what is considered good debt or bad debt; my concern is whether the debt is suitable, appropriate and affordable now and in the near future.  I would suggest that consumers do not understand or even care about the risks associated with having excessive debt?    

Since the late 1970s, there has been significant expansion in providing access to retail debt to consumers particularly through unsecured credit cards.  Financial institutions made use of advancements in tools such as computing power, data collection, analysis and risk modeling; all of which have expanded the willingness of lending entities to extend borrowing beyond their fully collateralized lending policies of the past.  Sophisticated credit risk modelling allowed for market segmentation and accurate forecasting as to the risks of default allowing the lending entity to set its target market / customers and pricing of its lending products with sufficient margins of profitability. The perfection of risk modeling and analytical tools opened the door to uncollateralized debt and credit facilities being offered for almost any type of consumer and for any reason with little need for secured assets / security.  In the past, unsecured credit cards applied standards for what type of responsible purchases could be made by the credit card, however, these restrictions have all but disappeared including credit cards and debit cards use and welcomed at gambling sights and casinos.

So, with the capacity to lend expanding greatly, the next step was to encourage consumers to rely on debt to satisfy their needs / wants; why wait.  Again, with the use of technology and data collection, we have seen the science and power of data and predictive analytics being use as a key tool in social media, marketing and advertising; methodically used to alter consumer views, perceptions and opinions. Using powerful analytics to change / shape information and facts to alter consumer opinions, beliefs, tolerances, rationality for the sake of selling.  

Consumers are bombarded through multiple communication channels including social media ads, influencers, marketing events, misleading advertisements, e-mails, SMSs, etc. and promoting consistent messages to spend and to spend now…and coupled with the message that access to credit /debt is not a problem.  We are consistently reminded by marketing and advertising messaging that: “You are richer than you think.”; “You work hard and deserve to enjoy life now before its too late.”; “Don’t put off your dreams when you can have it all now”; “Act now, once in a life time offer, and for a limited time”. 

So over decades of being bombarded to spend and with expanded access to debt, consumer behavior has been significantly altered whereby we rely little on savings to fulfil our needs or wants; instead, we are the “have it now society” and have developed a “dependence” of a living standard based on debt and credit facilities.

Debt and access to credit facilities have spurred “have it now” consumer behaviour and created a range of life’s dependencies. 

I offer no comment in as to what should be considered good debt or bad debt; my concern remains whether such a debt addictive culture is suitable, appropriate, affordable and most of all, sustainable.