What is Consumer Debt?
Consumer debt is a broad term that covers all types of consumer credit that is currently outstanding. This type of debt is usually understood to include any and all extensions of credit that have to do with the acquisition of goods that are considered consumable and subject to depreciation over time. Except in extremely rare cases around the world, consumer debt is not secured by pledging any type of collateral to back the debt. Perhaps the most common type of consumer debt in the world today has to do with credit cards. When an institution issues a credit card to a new customer, most formats call for applying a specific credit limit to the card. The credit limit represents the maximum amount of credit card debt that the cardholder can accrue. Any outstanding balance on any credit card is considered to be consumer debt. Along with credit cards, another common form of consumer debt is the auto loan. Like many examples of a consumer product, an automobile is understood to be an asset tha
