Credit card debt in the US is getting out of hand

AdamK47

Lifer
Oct 9, 1999
15,264
2,883
126
Delinquencies are up. Credit card companies are writing off more and more of that debt. Current trends are matching 2008 increases.

 

highland145

Lifer
Oct 12, 2009
43,413
5,839
136
I wonder why...
The orange man.


I'm not seeing more defaults but I have really good peeps. I am seeing them avoiding borrowing if they can help it. Also, shit crap ton piss poor fucked up credit scores. Peeps just aren't paying their creditors and wonder why I won't give them my $. Truly, they don't get it. It's like they think they deserve a participation $ ribbon.
 
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Red Squirrel

No Lifer
May 24, 2003
67,588
12,219
126
www.anyf.ca
I don't get how anyone actually keeps a balance on their credit card. Use it to buy stuff, but pay it off as you go. Even if you don't have the cash, use a credit line, which has much lower interest. Ideally you should not hold on to credit at all but it's harder to not do now days since everything is so expensive.
 

Fenixgoon

Lifer
Jun 30, 2003
31,667
10,101
136
I don't get how anyone actually keeps a balance on their credit card. Use it to buy stuff, but pay it off as you go. Even if you don't have the cash, use a credit line, which has much lower interest. Ideally you should not hold on to credit at all but it's harder to not do now days since everything is so expensive.
Imagine a world where most of the economic gains go to the people at the top, and the economic system is designed to keep everyone else in something akin to wage-slavery

Or don't imagine it, because that's basically how things are setup
 
Nov 17, 2019
11,025
6,591
136
I have virtually no income. I don't even pay Fed or State income taxes since my AGI is under the threshold. Yet I have an 800 credit score and no debt over 30 days. I buy what I need. Sometimes I buy what I want. I have several CCs and rotate their use so none get out of hand.

Live below your means. Manage your budget actively.
 

Red Squirrel

No Lifer
May 24, 2003
67,588
12,219
126
www.anyf.ca
Yeah money just doesn't go that far anymore. The only way to "live within your means" and stay that way is to reduce your quality of life so that inflation doesn't affect you, or to keep working harder (ex: get a second job or higher end job) to try to make more money.

What was living within your means 10 years ago is suddenly not anymore, even without changing anything.

But with that said there are in fact lot of bad decisions people make that they really don't need to, such as buying a brand new vehicle, or constantly getting a new phone. IMO you shouldn't even be buying a car new, unless your mortgage is paid off. And even then, if it's paid off, you're better off saving that money instead of spending it. 20 years ago cars were more affordable so it would make financial sense to buy new than to buy used and keep paying for repairs but now days even if you spend a lot on repairs it's still cheaper than new.
 

AdamK47

Lifer
Oct 9, 1999
15,264
2,883
126
Mortgage foreclosures are also on the rise. Increased Q4 '23 and Q1 this year.
 

[DHT]Osiris

Lifer
Dec 15, 2015
14,238
12,368
146
I don't get how anyone actually keeps a balance on their credit card. Use it to buy stuff, but pay it off as you go. Even if you don't have the cash, use a credit line, which has much lower interest. Ideally you should not hold on to credit at all but it's harder to not do now days since everything is so expensive.
By having expenses that outpace your ability to pay for them. Even a few limited 'emergency, once a decade' spends can build several years' worth of expenditures all at once.
 

H T C

Senior member
Nov 7, 2018
562
401
136
I only bought stuff on credit twice:

- my house
- fixed my teeth

I amortized BOTH times, after seeing on TV in a news channel "savings segment", that a person would "save money" A LOT MORE this way than having the money in a bank earning interest AND THEN amortizing, and ended up finishing the fixing teeth payment almost 1 year before it was due (in just over 3 years instead of 4), and my house payments WELL BEFORE they were due (in around 21 years, instead of in 30 years).


I ALWAYS pay the full amount when using a credit card to pay for something: NO EXCEPTIONS.

By having expenses that outpace your ability to pay for them.

Exactly.

- NEVER, "in normal circumstances", spend above your means
- ALWAYS keep @ least 1 months worth of salary EXTRA available (preferably more), in case of unexpected expenses (like car problems, major appliances problems, etc)


Ofc not all unexpected expenses are the same, and some can be SUBSTANTIALLY HIGHER than any "safeguards" you have in place, such as medical expenses for example.
 

[DHT]Osiris

Lifer
Dec 15, 2015
14,238
12,368
146
- NEVER, "in normal circumstances", spend above your means
Shit, someone should have told me that before I needed car work done that cost more than I had. If I only had known I wouldn't have spent it, and instead lost my job.
- ALWAYS keep @ least 1 months worth of salary EXTRA available (preferably more), in case of unexpected expenses (like car problems, major appliances problems, etc)
I've had unexpected expenses that cleared my monthly salary. That's still dumb though, because if I've got a month's salary to spare, I'm putting it on debt (which reduces my monthly, or at least long-term expenses), not sitting on it like a sad drakeling's treasure hoard.
 

H T C

Senior member
Nov 7, 2018
562
401
136
Shit, someone should have told me that before I needed car work done that cost more than I had. If I only had known I wouldn't have spent it, and instead lost my job.

Hence the "in normal circumstances" part ... and that falls in the unexpected expenses "category".

I've had unexpected expenses that cleared my monthly salary. That's still dumb though, because if I've got a month's salary to spare, I'm putting it on debt (which reduces my monthly, or at least long-term expenses), not sitting on it like a sad drakeling's treasure hoard

This means you ALREADY spent more than you earned: unless that's because of previous unexpected expenses, you're living above your means.
 

MrSquished

Lifer
Jan 14, 2013
21,493
19,905
136
It's been shown in various studies and articles that a lot of this inflation is actually greedflation. What do you think companies are not going to use the cover of inflation to jack up their profits?

It's about time we start to correct this increasingly irresponsible use of the word inflation without taking into account corporate greed.
 

Red Squirrel

No Lifer
May 24, 2003
67,588
12,219
126
www.anyf.ca
By having expenses that outpace your ability to pay for them. Even a few limited 'emergency, once a decade' spends can build several years' worth of expenditures all at once.

Yes but why not at least pay it with the credit line, it's lower interest. Credit lines are like 5-10% while credit cards are like 19%. In an ideal situation you should have savings built up for emergencies, but that is hard to do now days, so it's a good idea to have a credit line even if you don't need it at least it's there if you do.
 

[DHT]Osiris

Lifer
Dec 15, 2015
14,238
12,368
146
Hence the "in normal circumstances" part ... and that falls in the unexpected expenses "category".



This means you ALREADY spent more than you earned: unless that's because of previous unexpected expenses, you're living above your means.
Or: shit happens. Too many things break at once, too many expected expenses piled on top of unexpected ones, medical bills, missed rent payments from a property, or what the hell ever else eats away at monthly expectations. If you have money, you tend to not end up in debt. If you are ahead from early on, you can usually cover stuff that comes up fast enough to stay ahead of it. If you don't, odds are good one solid kick in the nuts is enough to keep you on your heels for years' worth of expenses later, even if you 'live within your means'.

That's a loaded term anyhow, it's basically a no true Scotsman fallacy. Anyone who ends up in debt clearly wasn't living within their means, whereas anyone who doesn't must be. I spend less than a quarter of my salary on rent, never travel, and have an extremely limited entertainment budget, and I'm still spending more on debt than anything else, but inevitably every few months some gigantic damn multi-thousand dollar expense rears it's head and pushes everything right back where it was.
 

[DHT]Osiris

Lifer
Dec 15, 2015
14,238
12,368
146
Yes but why not at least pay it with the credit line, it's lower interest. Credit lines are like 5-10% while credit cards are like 19%. In an ideal situation you should have savings built up for emergencies, but that is hard to do now days, so it's a good idea to have a credit line even if you don't need it at least it's there if you do.
Yeah those are better, but not as easy to obtain (or at least not as advertised), sometimes have shit tacked on to them, and for modern generations aren't as accessible (ask anyone under 40 how many checks they have on-hand).

Yeah my ideal situation would be cleared cc's, ~5k in 'emergency savings', double-triple mortgage principals every month (I double when I can), max'd roth ira, and the rest to who-knows-what. Someday.
 

highland145

Lifer
Oct 12, 2009
43,413
5,839
136
Or: shit happens. Too many things break at once, too many expected expenses piled on top of unexpected ones, medical bills, missed rent payments from a property, or what the hell ever else eats away at monthly expectations. If you have money, you tend to not end up in debt. If you area ahead from early on, you can usually cover stuff that comes up fast enough to stay ahead of it. If you don't, odds are good one solid kick in the nuts is enough to keep you on your heels for years' worth of expenses later, even if you 'live within your means'.

That's a loaded term anyhow, it's basically a no true Scotsman fallacy. Anyone who ends up in debt clearly wasn't living within their means, whereas anyone who doesn't must be. I spend less than a quarter of my salary on rent, never travel, and have an extremely limited entertainment budget, and I'm still spending more on debt than anything else, but inevitably every few months some gigantic damn multi-thousand dollar expense rears it's head and pushes everything right back where it was.
This
 
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SteveGrabowski

Diamond Member
Oct 20, 2014
6,965
5,889
136
It's been shown in various studies and articles that a lot of this inflation is actually greedflation. What do you think companies are not going to use the cover of inflation to jack up their profits?

It's about time we start to correct this increasingly irresponsible use of the word inflation without taking into account corporate greed.
Corporations have always been greedy. It's just the government gives less fucks than ever and lets them swallow up competitors to create uncompetitive markets.
 

nOOky

Platinum Member
Aug 17, 2004
2,865
1,878
136
People spend too much on things they don't need. A portion of the working class does live on poverty levels especially depending on their location. But generally a lot of people just buy too much and don't budget their money. I am a good example, 30 years ago I was always broke and had about $4000 in credit card debt and other debt on top of that. I got fed up and did the Dave Ramsey thing before I knew what it was. I worked hard, which got me a promotion. I sold some stuff, busted my ass, and paid everything off within 9 months. I started saving, getting 6 months worth of wages for an emergency fund, and then hitting the retirement hard. I also saved up for my next car before I bought it. A year before this if you would have asked if it was possible I would have said I needed a huge raise. Actually I needed to get control of my spending.

I wish people knew how much better it is actually having money in case of an emergency, and actually earning interest rather than paying interest. If my car breaks down or my furnace dies it sux, but it's handled, and then I put that money back. My coworker and I were discussing this at work and he said how much do you have in your checking and I said about $4,500 right now to which he replied man if I had that I'd buy a keg of beer and a 75" tv to which I replied that's why you'll never have that.
 

SteveGrabowski

Diamond Member
Oct 20, 2014
6,965
5,889
136
People spend too much on things they don't need. A portion of the working class does live on poverty levels especially depending on their location. But generally a lot of people just buy too much and don't budget their money. I am a good example, 30 years ago I was always broke and had about $4000 in credit card debt and other debt on top of that. I got fed up and did the Dave Ramsey thing before I knew what it was. I worked hard, which got me a promotion. I sold some stuff, busted my ass, and paid everything off within 9 months. I started saving, getting 6 months worth of wages for an emergency fund, and then hitting the retirement hard. I also saved up for my next car before I bought it. A year before this if you would have asked if it was possible I would have said I needed a huge raise. Actually I needed to get control of my spending.

I wish people knew how much better it is actually having money in case of an emergency, and actually earning interest rather than paying interest. If my car breaks down or my furnace dies it sux, but it's handled, and then I put that money back. My coworker and I were discussing this at work and he said how much do you have in your checking and I said about $4,500 right now to which he replied man if I had that I'd buy a keg of beer and a 75" tv to which I replied that's why you'll never have that.
Nah the problem is people spend way too much on things they do need like housing, medical care, education, vehicles, and such. All that shit has skyrocketed in price this century.
 

highland145

Lifer
Oct 12, 2009
43,413
5,839
136
@SteveGrabowski pc and I are about the same age. It was very possible to buy a house, car, pay your bills and eat. I have no debt but starting all again would be a struggle.

Ha, you could buy a kia.
 
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