This article needs additional citations for verification. For information about loans to consumers, see Consumer lending. In economics, consumer debt is the amount owed by consumers, as intermarket analysis forex malaysia to that of businesses or governments.
In macroeconomic terms, it is debt which is used to fund consumption rather than investment. In recent years, an alternative analysis might view consumer debt as a way to increase domestic production, on the grounds that if credit is easily available, the increased demand for consumer goods should cause an increase of overall domestic production. Personal debt is on the rise, particularly in the United States and the United Kingdom. However, according to the US Federal Reserve, the US household debt service ratio is at the lowest level since its peak in the Fall of 2007.
Long-term consumer debt is often considered fiscally suboptimal. While some consumer items such as automobiles may be marketed as having high levels of utility that justify incurring short-term debt, most consumer goods are not. For example, incurring high-interest consumer debt through buying a big-screen television “now”, rather than saving for it, cannot usually be financially justified by the subjective benefits of having the television early. In many countries, the ease with which individuals can accumulate consumer debt beyond their means to repay has precipitated a growth industry in debt consolidation and credit counseling. A country’s private debt can be measured as a ‘debt to GDP ratio’, which is the total outstanding private debt of its residents divided by that nation’s annual GDP. A variant is the consumer leverage ratio, which is the ratio of debt to personal income. Household Debt Service and Financial Obligations Ratios”.
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