Credit card and loan are instruments that can be used for people who is short in cash, but urgently need it. The flexibility of using money that we do not own can blind people from realising its own financial power. As a consequence, they ended up in huge debts. An idea to manage this issue is by creating difficult rules for borrowing huge amount of money. While it may work to defer people from reckless borrowing, we can also consider a solution in giving extensive education on financial loans.
Having stricter rules on borrowing big sum of money can be seen as automatically removing people that doesn’t have the capacity of borrowing the big sum of money in the first place. However, this might also defer people who sincerely need the money, are able to repay in the future, and unfairly being cut down by the strict system. In this case, the act of borrowing money might not reach its fullest potential.
On the other hand, if we look at it from the borrowers point of view, we can see that this problem tend to happen because they do not think clearly when making such decision. When they are faced with an urgent situation, usually the will just accept whatever rules as long as they can get the money. Giving an education and awareness of the good and bad sides of borrowing money will give them space to make wiser decision. And if this the case, people who tend to believe borrowing money is an escape plan can stop themselves from making reckless decision.
In conclusion, the rules for borrowing credit card and loans can be put more strictly to stop people who do not have the capacity to repay. However in my opinion, the solution should focus more on giving the people education on this kind of financial decision. So instead of making it more difficult for people to borrow more money, we give the people awaraness to stop their own selves from reckless borrowing.