The New American Middle Class Needs a Change
There are a lot of financial challenges faced by credit-constrained America. The reality has made it difficult for reaching financial success. There are millions of people who are struggling to afford their own home, pay for the kid’s education, and create financial security. Close to half Americans cannot afford any uninvited expenses that come their way. Those who do not have enough money also don’t seem to trust the banks. They think that the products by banks are not suitable for them. Moreover, they also doubt whether they will be eligible for a loan.
Such challenges faced by the Americans are not completely understood by the policymakers. People are also turning to non-bank institutions for taking loans due to stringent bank policies. Policymakers should pay enough attention to this gruesome problem. After all, it affects the financial situation of its residents.
A recent panel meeting in this regard exposed how the non-prime Americans are surviving. They can easily go off track when it comes to finances if they lose a job, have a medical emergency or even a surprise accident. It is also a problem for those who are not Native Americans. They face issues like racism which makes the situation even worse.
This new category of middle class refers to people who are college educated and employed Americans. They do not get any financial assistance from mainstream credit providers. Therefore, this group of people applies for loans from institutes that are not mainstream. To the contrary, these residents have a better sense of their finances and are also aware of their credit. They check their balance information way more than the prime consumers would.
It is the need of the hour to solve the impending problems of this new middle class. Of course, there is no solution that will apply to everyone. However, there are a host of changes which can be made in order to ease the trouble. For instance, banks should provide real-time payments for the non-prime members which they can actually afford to pay. The baking regulations also have to be rechecked so that it is relevant for the current situation.
A federal framework has to be created in order to make the policies better for the common man. The existing strategies are only suitable for prime members. Taking loans from non-financial entities also puts people into a lot of risks. Moreover, they have to pay a hefty interest which can do more harm than good. As a matter of fact, the people who fall under the non-prime category are those who actually who work hard and are the backbone of several companies and businesses.
The authorities and policymakers need to be more empathetic toward the financial condition of these Americans. If no action is taken, the common man would continue to suffer. Certainly, there is no such thing as a quick fix in this regard. However, discussions like this pave way for creative solutions. Understanding the problems faced by the new American middle class will help in creating sound policies that actually work in their favor.