Americans rack up $19 billion in credit card debt in one month
Americans rack up $19 billion in credit card debt in one month
Wells Fargo reports a surge in U.S. consumer credit card debt, indicating potential financial stress among households.
"Americans spend $19 billion dollars using credit cards in one month"
Fixed it for you. A whole lot of us use credit cards exclusively. And we pay it off each month.
Could be. The article tries to paint a picture where that isn't quite the case:
"Wells Fargo reported on Fed data showing several regions experiencing a tightening in credit availability and an uptick in delinquency rates, pointing to a growing financial burden on households."
"Specifically, the New York Fed noted an increase in financial pressure among families with high debt burdens. Similarly, the Philadelphia Fed observed a widening gap where low-income households are reducing their spending but incurring more debt, contrasting with high-income households that continue to spend freely."
It's not a complete picture so I guess people are free to fill in the gaps as they please, but I don't see anything definitive here.
I'm close to a thousand £ back in rewards over the few years I've been using it. It costs me £2 every month and i get a minimum of £20 back per month. But if I can pay for my car insurance or something truly big? Oh boy do my cash back go through the roof!
Could i live on debit alone? Sure. But then i wouldn't get hundreds back every year for simply using my card.
Plus guaranteed insurance on purchases. Doesn't show up and paid by cc. Reverse it. Paid by debit card, tough luck.
For a while, i wondered why Americans tend use their credit cards instead of debit cards but then it occurred that they are encouraged to use credit cards because you cant get into debt using debit cards and debt is very profitable.
There's that, but there are also more legal consumer protections against fraud with credit cards than with debit cards.
You also have to have credit to get loans. I ran into this issue when I bought a house. I hadn't had a credit card in years because it was too easy to get into debt. The only thing that saved me is I am on one of my folks credit cards for rare emergencies if I'm watching their house and something goes awry (like the dehumidifier shits all over the basement floor and needs replaced).
I would totally use my debit card more if it has the same level of fraud protection that credit cards have.
It'd be nice to be able to do a chargeback on a debit card transaction.
Do you understand why there are so many incentives to use credit cards? Your reply and those under you are listing why credit cards are the better choice, however I wonder if they all know they are being played.
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
I'm gonna wait and see if you can figure out how your statement relates to credit cards being more profitable for the ruling class than debit cards...
If you’re responsible with them you get a number of perks. Many cards have some mix of the following:
- extended warranties on electronics
- fraud protection (I had a credit card stolen and $17k charged to it, all forgiven)
- pretty easy dispute system if someone fucks you (Iceland Air fucked me real bad on a canceled flight/voucher bs scam they were pulling on people during Covid. I filed a dispute and got all my money back)
- % back on all kinds of purchase categories
- free road side assistance
- air miles
- upgrades in flights
- iirc some hotels and rental car companies require them
- etc etc
I’ve never paid interest on a single card in my life because I always pay my balance in full. Works out great for me. If you’re bad with money, I’d stay way.
This!
There are a lot of consumer protections on credit cards that do not apply to debit cards. I pay for basically everything with a credit card. I pay the card off every month.
We also can't get cashback rewards with the vast majority of debit cards. It adds up.
It’s also because a lot of people see the rewards as ways of getting free money. However that’s really only the case if you pay your card regularly. As well some Americans truly don’t have the required income to live. So they go into debt. It’s terrible, sad, and wrong on so many levels, but it’s a major part as well.
because you cant get into debt using debit cards
Lol that's cute. They've recently started changing this shit, but at least when I was in college, banks were 100% putting people into debt and making tons of money on overdraft fees. For using debit.
They had a program called, "overdraft protection" that customer service loved to sign you up for if you accidentally overdrafted. That should fix things right?
Lol no. Turns out what they meant by "protection" was "protection from your card being declined." In other words, if a purchase was going to put your account into the negative, instead of simply declining the transaction and preventing the customer from incurring a fee, it makes sure the purchase goes through, and the customer is charged $35 for overdrafting.
They also had a practice of re-ordering a customer's transactions in order to maximize overdraft fees. I believe this one has been illegal since Obama though.
Frankly I use my credit card as my debit card. Hell I don't even have a physical debit card. Why you ask? Rewards points.
All to the benefit of the oligarchs of this nation, which will get bailed out if they don't anyway.
oooOoOoo - getting dangerously close, aren't we? What happens when say people take out more credit than US banks can actually honour?
This... Americans Are Tapped Out
Fair... but what I was alluding to is a banking crash that will make the "great recession" seem like a fart in the wind.
Think the LA riots, but in every major city, military being mobilised, civil war, the next violent revolution, what have you - because that debt hole will make a crater out of society.
And no, you don't want violent revolution. Why? Germans didn't become Nazis overnight. The economic collapse after WW1 put Germans in the position of being forced to bring wheelbarrows of cash to the store for a single loaf of bread. This made German people so desperate and angry that... well, you know the rest.
This is definitely an order of magnitude calculation, but doesn't that correspond to $60 per person in the US? Is this big number scary article?
Depends. Are you dividing by total population or actual cc holders? Because the latte isn't as big.
BUT THE ECONOMY IS BOOMING!!
Hooch, hookers and coke or wage theft?
Stats from some googling. Assuming there are 250 million adults in US, and 80% have credit cards, that gives me 200 million holders, or ~$100 per person. That's not really a whole lot of money anymore. Not in a world where taco bell costs $20.
Sorry, everyone. This is about 80% my fault. Camgirls are hot.
This could be another indicator that we are going into recession. I did not read the article (because who does that? 🤣) but when you look at rising credit card debt combined with the mass layoffs, it usually means folks are on their last legs, financially speaking.
That is assuming there actually is a problem with higher credit card debt and the topic is ‘t being sensationalized, of course.
Another indicator to watch out for is falling revenue in earnings reports. Falling revenue, particularly in retail and consumer goods spaces means recession is inbound.
I firmly believe that, absent some additional support, we will enter a recession within 2 years.
Note: I don’t claim to be an economist, but I am old and I have lived through a few of these downturns.