#rcld

Impact on the economy

Recyclable lifetime consumer debt (RLCD) plays a very huge role in the day to day economy as it’s impossible to live without any debt for any individual. Its impact is such that an economy can go bankruptcy with in no time. It can create multiple effects on the economy. If you are borrowing money, you might spend it in the form of creating new jobs which means again spending is doubled so is debts.

Positive and Negative impact on economy

The impact RLCD creates on economy need not be negative always, it can be positive also. If an individuals’ lifetime consumer debt ratio is less than his earnings ratio then it will not create any negative impression as it turns out to be a neutral and keep the debt in control. With more middle and low level people earning lower than their debts the ultimate result will be negative on the social economy. An individual or a section of people can’t impact the economy on a positive note always.

Increasing interest

Borrowing money has a role to play in deciding the interest rate of any financial institution. If your RLCD is more then you are paying variable rate of interest mostly at the higher side. Economy might find it difficult to come up with proper rate so that consumers can have smoother transactions

Gap between goods and services

When the rate of recyclable lifetime consumer debt increases, the purchase capacity of individual using money drastically reduces as he tends to buy with loan always. This results in creating a gap between goods and services especially in credit line. Instead of saving money he/she is spending more using loans which in turn increases individuals’ debt. After all you can’t purchase new home using credit card alone

Individual decision and perception