Posted on 09/11/2017 3:01:53 PM PDT by buckalfa
Americans are starting to pile up more credit card debt than ever before.
According to a new study released Monday, U.S. consumers added $33 billion in credit card debt during the second quarter of 2017, making it the second-highest point of debt since the end of 2008.
(Excerpt) Read more at foxbusiness.com ...
Tack on the $1.3T? student load debt.
isn’t climate change going to kill us all before any of it matters?
bmp
Could you please elaborate? I don’t understand the point you are attempting to make.
Yes, it most likely would.
I will likely be abnormal here on FR. I have almost exactly $1 million in debt (main house, 3 rental houses, small amount of other debt). However, my assets are worth close to $2 million. Also, my weighted average interest rate on the debt is less than 3.5%, it reduces my taxes owed, I get nice rental income and I don’t have all my eggs in the stock market. My goal is to have my assets worth $4m and no debt in about 10 years so I can retire at 45ish. Debt can be a tool if used widely, but 90+% of Americans do not use it wisely.
Nope - this doesn’t include car loans, student loans, housing loans and a few other types of loans as well. There is roughly $15 trillion in mortgage debt outstanding, plus 1.5T in student loans and another trillion in car loans. Personal debt is pretty similar to US Govt debt in aggregate. Plus, then there is business debt and state/local gov debt as well.
Ever since I paid off my college & law school student loans in December, 1997 (in 4 1/2 years), I’ve maintained no debt. I have an Amex Gold that I pay every month and get points, and a couple of credit cards that I use when I need a few months to pay for an unexpected larger expense, but I extinguish that debt quickly.
My FICO is in the low 800s and the sites tell me that I need more available credit to increase my score. Not interested. Ridiculous.
I know several people who were in your exact position. Then 2009 happened.
The areas I have housing in only lost 10% in 2008-2009 bc they are a lot more steady and rents went up. I’m also extremely diversified and will reallocate to cash and bonds if I think a recession is imminent. I got out of stocks in early 2008 last time although I waited until 2012 to get back in significantly so missed some upside. Plus I make a lot from day job and am saving 100k/yr. I’ll be fine.
So will we.
If you are a long and good customer, your card gives a credit line. That credit line can be quite substantial and can be accessed for as little as 4-5% per year.
Drawing on that line for lots of purposes makes sense and is justified if it is easier and cheaper than using other assets.
So, I would guess that rather than go through the hassle of a local bank loan, drawing on the line is quicker and easier. That draw down become part of the total in question and is not subject to the onerous ~25% rates. The growth can actually be an indicator of an improving economy
Good to hear!
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