Current Situation on the Consumer Credit Market in the U.S Term Paper

Current Situation on the Consumer Credit Market in the U.S - Term Paper Example This paper offers contemporary analysis of the recent tendencies in American market for consumer loans. The research clearly shows that the situation in the market is gradually improving, considering the growth in consumer loans provided. Consumer purchases just like the entire consumer behavior, is a complex one. Businesses as well as academicians have been focusing on this behavioral pattern for quite some time. In the post crisis situation the business houses also need to have fair knowledge of consumer’s income. In the post crisis situation where most countries are still recovering from economic downturn, consumers are experiencing low disposable income. The effects of credit crunch of 2007 fails to die down as organizations may not be able to finance sufficient credit and this is likely to have an effect on consumer credit. Clearly after the global financial crisis US economy has suffered a loss in mortgage markets. The credit situation has been deeply influenced by financial crisis. Bad debts as a result of easy availability of credits have culminated into a crisis. Financial crisis was just an outcome of accumulating debt. During the economic times in 2005 consumer spending was at such a rate that savings had landed on zero. Post crisis consumers are increasing their savings rate. Although still much in wide usage consumers are trying to make less use of credit cards. In recent times banks have made some recovery and lending is again taking place. They are mainly supplying student loans.