4.+Easy+Credit

"Many people in the 1920's were living beyond their means because it was a time of great economic boom. People did not consider saving money for the future. Many people bought expensive luxury items using money they did not have. They bought goods on credit, which means consumers agreed to buy now and pay later for purchases. This was also in the form of an installment plan, usually in monthly payments that included interest charges. Installment buying allowed lenders to repossess an item if the borrower missed just one payment. By making credit easily available, businesses encouraged Americans to pile up a large debt. Many people then had a hard time paying off their debts. Faced with debt, consumers cut back on spending which lowered prices, which meant that farmers, businesses, and nations could not repay their debts."