Americans now owe $1.13 trillion in credit card debt
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I put my rent on the card if they’d let me for that cash back.
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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).
Fuck taxes and shit they need 2 weeks of Swahili
-Literally my school.
Okay, but also Swahili would be a pretty cool fucking subject. If it’s not helpful at least it should be interesting.
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…
Doing gods work there. All we can do is our part to help those around us.
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personal finance wasn’t taught
Pretty sure this is by design… How many other people are in the same boat as my coworker? How many millions are they making off people like her?
Even for myself… I didnt get to the point where i was in her situation, but my own financial literacy wasnt that good just a few years ago… I had no knowledge of investments or anything. My parents raised me to just give all my money to the bank to take care of
Wasnt until i took the time to learn the basics when i realized the bank is NOT your friend. You’ll take 100% of the hit when the economy has a meltdown like 2008, but when you have a massive 10 year bull run and the SP500 goes 4x, you might see half of those gains in the bank mutual fund…
I pulled all my mutual funds and started self directed investing… Way better gains than the bank
Banks are totally profiting off our ignorance and fear of numbers
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.
We used to call this home economics. Too bad they scrapped it in our public school system. Kids want to learn this stuff too that’s the sad thing.
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Math education is a disaster. It seems to be thought of as symbolic calculation busywork that’s supposed to translate to a good job somehow. I respected the proofwriting classes a lot more than the number crunching ones
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Have you looked at math education in the US in the last 15 years? Because it is a lot better than the bullshit they did when I was a kid.
Now kids get an actual understanding and hence intuition about all of it instead of the 1970s approach: “this is the rule, you don’t have to understand it; now, shut up and do it!”
Also, they teach kids about useful shit now like media literacy. In elementary and middle school. And they teach them a bit about economics, jobs, salaries, and budgets.
My kid is a freshman in HS now so I can’t speak to whether they teach about personal finance type stuff but I would be surprised if they don’t given the track record so far.
It’s telling how many parents complained because they can’t understand their third grader’s math homework. Math intuition and understanding should be the main focus at the earlier grades and crap like rote memorization of the times tabs should be dropped. Maybe I’d even teach formal logic and basic proofs in middle/high school (besides just geometry class)
Most people understand the math.
Very few people can delay gratification.
I don’t find that at all. I get the a’ha moment all too often. They literally just were never taught how any of it worked. Takes maybe 5-10 min of telling someone how it works, how the credit score works and how to manipulate it, and how to use credit without letting it get away from them.
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I feel that’s not the same thing as Joe Plumber under standing he pays a 30% charge on the balance of his credit card.
Going as planned. They want customers that carry balances, pay late fees, pay overdraft fees, etc.
I put a lot on parents for not teaching their kids. My kids are going to be prepared and it isn’t because of the school system.
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.
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Do you recommend any particular card for 0%? Looking to do a balance transfer.
Nerdwallet keeps track of whats currently available
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.
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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!
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.
The concept of credit card sound stupid . Here barely any use them . We use debit card .
Insurance and fraud protection.
That’s what we have with debit cards.
Maybe in your bank. Most banks don’t offer any protection for debit cards. Credit card companies offer more protections and that’s why people use them.
Many do offer protection but during the period between fraud occurring and the resolution, you don’t have access to your money. With credit cards, it’s the banks money that’s missing.
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.
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Those are rookie numbers.
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.
