Average credit card balances jump 10% to a record $6,360, and more consumers fall behind on payments
Average credit card balances jump 10% to a record $6,360, and more consumers fall behind on payments
Americans are increasingly leaning on credit to make ends meet, boosting balances and total debt to fresh highs.
Americans now owe $1.13 trillion in credit card debt
https://www.marketplace.org/2024/01/29/why-credit-card-debt-rising-again/
Another reason credit card debt has been rising is because of the strong job market.
That’s because people with jobs feel comfortable spending money on their credit cards, said Liz Ann Sonders, chief investment strategist at Charles Schwab — a Marketplace underwriter.
Hmm. I would have guessed the opposite -- that you borrow if forced to in an emergency like a job loss, but if you have income, then you don't need to take out debt. Apparently that's not what humans actually do.
A better metric is whether they're making payments, as in OP's link. If I'm paying for it either way, why not use my credit card and get bonuses like cash back rewards?
There's a CC that does that. It's called bilt. I have one and it's pretty nice but I'm not affiliated. It's unfortunately set up through one of the shitty banks but I haven't had any problems with it and I get a nice extra rewards points on rent and Lyft that I wasn't getting before.
The amount of adults I teach how credit cards actually work is staggering and I’m just a manager. It’s pathetic how little we actually prepare our kids for the real world instead opting to teach them calculus (that most won’t actually need to use).
One of my young coworkers had been running a huge balance on her card for two years. She was making minimum payments every month and didnt understand why the number wasnt going down.....
I had to sit her down and explain how interest works and helped her figure out how to take a lower interest loan to wipe out the credit card debt and get a repayment plan going
I wonder what would have happened to her if i didnt overhear her phone conversation and decided to be nosy and ask her about the credit situation...
Important things I had to learn on my own in adulthood:
How to research and vet sources.
How to cook and clean.
Amoritization of loans (car and home) and agreements.
Rental agreements and the basics of contract law.
Student loans (the interests rate plus accrual of interest while your are in school).
Taxes - federal, state and local taxes. What their rates are and what they pay for etc..
Insurance (Health, Home, Renters, Car etc.)
Utilities - how they are calculated etc.
Credit cards, interest rates, late payment consequences etc.
Retirement Programs (pensions, IRA, 401K etc.). Investments, how they work, etc.
Basic home repair and remodeling (electrical, plumbing, etc.). Basic car care etc.
calculus
I'd say that about the first half of Calculus I was useful to me, taught concepts.
However, a lot of the rest of it, as well as most of the next two calculus classes I took, involved memorizing tricks to do symbolic integration by hand. That is, frankly, of limited use to even people who need to do symbolic integration.
I remember going by my calculus professor's husband's (another math professor) office once to deal with some project I was doing and some integration came up and he promptly threw it into Mathematica on his computer to do it. I commented on it and he said "yeah, I don't have time to spend doing these by hand".
My smartphone and computers have Maxima installed, a free and open-source computer algebra system capable of doing symbolic integration. I have that with me all the time. It's very rare that I need to do symbolic integration in the first place.
"But what if you don't have a calculator with you?"
Today, that's usually a smartphone, but same idea.
In my parent's generation, they taught people to manually compute square roots. It was some numerical approximation, don't know what they did exactly, probably something like "pick a number, divide, average result and divisor, repeat with average". They didn't bother to teach that by the time I was going to school. It was just expected that you'd use a calculator.
I remember reading Richard Feynman's book, about how he used to show off some mental math shortcuts (much more useful in an era before calculators).
I agree that memorizing certain mental math processes can be useful, but the time wasted on doing symbolic integration in calculus is still one of my major annoyances, looking back. There is no shortage of material in mathematics that is useful and could be in the curriculum, and instead we did symbolic integration.
Maybe curriculum has improved since then.
The next paragraph says
That said, credit card delinquency rates have been rising this year, according to the Federal Reserve Bank of New York. That’s especially true among people with lower incomes and multiple types of debt.
From the original article
Meanwhile, households continue to show signs of strain — more cardholders are carrying debt from month to month or falling behind on payments.
(emphasis mine)
https://www.cnbc.com/2023/01/10/americans-lean-heavily-on-credit-cards-amid-inflation.html
Now, 46% of credit cardholders carry debt from month to month, up from 39% last year, according to a new report by Bankrate.
Credit card delinquencies surged more than 50% in 2023 as total consumer debt swelled to $17.5 trillion, the New York Fed reported Tuesday.
Liz Ann Sonders has an interesting theory that doesn't seem to have any factual basis.
The issue is that people's cost of living went way up but their salary didn't so to buy the same amount of food now is like 4 times as much. People end up running out of money before they get paid again because their money doesn't go very far now and they need to use their credit card to get by for a few days. Keep doing that for a few months and bam 6k in card debt lol.
let's goooo
it's a gamble, sure, but i'm waiting until climate change gets bad enough that their server farms get destroyed and our debts with it
The first rule of Project Mayhem is you do not ask questions, sir.
Gee, I guess slamming the brakes on the working man with high interest rates (thank the central bank!) screwed all the working class. And most of us still haven’t had a fucking chance to recover after Covid and war have fucked our finances, and honestly, it’s not like we’re all getting raises.
That's exactly it. The Federal Reserve is like "this is the only tool we have to control inflation", meanwhile the fuckheads at our Congress and Senate are like "40% of inflation is solely attributable to corporate profits, but our donors don't like talking about that sooo".
Inflation gets reigned in by fucking over the people least able to cope with job loss, insurance cost spikes, etc.
The judicial and legislative branches can get dry fucked by cactus and balsa wood for all I care, almost all of them.
Per card? Or total across multiple cards?
I had a $6,000 bill on one card, paid in full last month, but it was one of those one year 0% interest checks that I had used to pay off a large electrical project.
The rest of my cards have negligible debt. I try to pay off everything every pay day, but I recognize not everyone can do that.
Do you recommend any particular card for 0%? Looking to do a balance transfer.
I used Discover for a balance transfer. However, be sure you do the math. They have options like 0% interest rate with a 4% transfer fee to pay it off in 12 months. I chose instead 0% transfer fee with 5.99% APR over 15 months, but still plan to pay it off in 12 months.
The 4% transfer fee is on the entire balance as soon as you move it over... while the 5.99% interest is on your balance divided by 12 each month... which can get less and less each month depending on how much you pay off.
So for example... $5000 with 0% interest has a 4% transfer fee of $200. But $5000 with no transfer fee has 5.99% interest of around $25 for the first month, and less interest each month if you are paying chunks of your balance down every month. If you are not paying big chunks then the 0% interest with 4% transfer fee may be better.
It really depends on whether or not you plan on paying it off... and how fast you intend to do it. My previous interest was rising to 13% on one card, 19% on another... so 5.99% is much better for me.
Nerdwallet keeps track of whats currently available
Largely depends on the bank, I have 5 different cards that offer 0% balance transfers from time to time.
3 of them are with US Bank, but that might be because I've had accounts with them for 30 years. Another with Chase, another with Barclays.
I assume it's total outstanding debt divided by credit card holder. Kids, never carry a balance on your CC. Do not accept 20% as a reasonable loan. Spend against your budget, save up for big purchases and pay your CC bill in full!
Quiet you! The economy is doing great. Everyone is saying in the news.
Those are rookie numbers.
The concept of credit card sound stupid . Here barely any use them . We use debit card .
There are a couple benefits to a credit card as long as you are paying them off and not using them when you don't actually have the money to pay them off.
- It can improve your credit score which is important if you ever plan on buying a house, so you can get a loan.
-There usually aren't any fees for using the card like most debit cards have (at least where I live).
- many credit cards offer a reward system which you can use to get free stuff, or sometimes just cash back. I have a dividends and get a percentage back on every purchase up to a maximum.
So as long as you pay them off monthly, using a CC instead of debit can actually save you money and be a good thing. It's when you can't pay them off, and instead just meet the minimum payments that they become a problem since they have crazy interest rates.
It's often the other way around in yurop. Debit cards are free or cheap, credit cards aren't. Credit card scores aren't a thing. They mainly look at job status, income, savings, family money when considering giving a loan for house purchase. There are credit scores and blacklists, but it's more a background bank and government thing, not a game in your banking app.
Anyone know how they calculate it? Average of all credit card holders? All US households? Average of all those behind on payments?
$1.13T/$6,360 equals roughly 177 million people. There are 259 million adults in the US, so it must be by card holders.