Briefly describe the positive and negative effects of consumer credit.

The positive role of consumer credit: people can spend part of their future income on consumer goods that they can't afford at present, thus improving their consumption level. In order to achieve a balanced consumption in life, there is a mismatch between income and expenditure for both young and old people. Consumption in old age is realized by withdrawing savings, and consumption in young age is realized by using future income in advance through consumer credit.

Negative effects of consumer credit: its excessive development will increase economic instability and trigger inflation and debt crisis. For individuals, it is easy to make individuals fall into financial crisis.

Extended data:

Restrictive factors of consumer credit

1, the capacity and level of total supply, the higher the level of total supply, the larger the scale of consumer credit;

2. The actual income and living standard of residents. If residents' real income is low and their repayment ability is not high, blindly developing consumer credit will lead to increased risks;

3. The relationship between capital supply and demand. It has a constantly changing relationship with the scale of consumer credit. If the supply and demand of funds are tight, the scale of consumer credit will be even larger.

4. Consumption concept and education level restrict the popularization and total consumption of consumer credit. For example, in China, influenced by traditional culture, consumer credit started late and has a small scale, but it has developed rapidly in recent years, mainly reflected in the growth of housing loans and auto loans.

Baidu encyclopedia-consumer credit