Illustration: Aïda Amer/Axios
Posted on 09/19/2022 9:15:28 PM PDT by SeekAndFind
In June we reported that consumer credit - particular revolving credit - was through the roof, as tapped-out consumers relied on credit cards to make ends meet. This has only gotten worse..
Illustration: Aïda Amer/Axios
Acccording to an Aug. 30 report from the Federal Reserve Bank of New York, credit card balances increased by $46 billion from last year, becoming the second-biggest source of overall debt last quarter.
While both student and car loans hit all time new highs at the end of the 1st quarter.
And so it comes as no surprise from Bloomberg that more US consumers are saddled with credit card debt for longer periods of time. According to a survey by CreditCards.com released on Monday, 60% of credit card debtors have been holding this type of debt for at least a year, up 50% from a year ago, while those holding debt for over two years is up 40%, from 32%, according to the online credit card marketplace.
And while total credit-card balances remain slightly lower than pre-pandemic levels, inflation and rising interest rates are taking a toll on the already-stretched finances of US households.
About a quarter of respondents said day-to-day expenses are the primary reason why they carry a balance. Almost half cite an emergency or unexpected expense, including medical bills and home or car repair.
The Federal Reserve is likely to raise interest rates for the fifth time this year next week. Credit-card rates are typically directly tied to the Fed Funds rate, and their increase along with a softening economy may lead to higher delinquencies.
Total consumer debt rose $23.8 billion in July to a record $4.64 trillion, according to data from the Federal Reserve. -Bloomberg
The Fed's figures include credit card and auto debt, as well as student loans, but does not factor in mortgage debt.
The REAL crash will come when the credit cards are maxxed out.
Actually maxxing out 1 or 2 cards is not enough. My relative maxxed out 7 credit cards before she was forced to declare bankruptcy.
Everyone should get Maxed
Or is that Vaxxed?
I am so confused I don’t know anymore.
How many times should one get Maxed?
FWIW I am trying to be smart this time: I’m using my credit card as if it were a debit card. Every day I pay off the available balance so that I’m holdobg debt, not for years but for hours, and getting rewards. My only debt is my mortgage, and if push came to shove I would get a reverse mortgage on the remaining equity, pay off the mortgage, and let them have the house when I enter into glory.
The only rule breaker would be if it's a store credit card where the purchase has repayment terms at 0% - only if the household has plenty of cash of hand to pay it off early at any time.
Anything else is playing with fire.
Don’t spend money that you don’t have and pay your debts you willingly took on.
No one forced you to have that stuff.
Man up, or Woman up, and take responsibility for being an idiot.
And maybe, just maybe, learn from the mistakes you made and stop being an idiot....
You do not “declare” bankruptcy. It is proper to say that you “petition the court for relief” under the bankruptcy code.
I’m a firm believer in paying off my credit cards in full each month. I like getting all the rewards while paying none of the interest.
Reminds me of the movie "The Jerk" with Steve Martin and Bernadette Peters playing Marie.
Marie: "I don't care about losing all the money. It's losing all the stuff!"
A fool and their money are soon parted. An idiot goes into bankruptcy due to credit card debt.
The only rule breaker would be if it's a store credit card where the purchase has repayment terms at 0% - only if the household has plenty of cash of hand to pay it off early at any time.
Anything else is playing with fire.
The whole country is a raging inferno.
Actually more a result of the failed attempt to oppose the weather that is causing stagflation.
And those same useful idiots in credit card debt invariably vote for the democrat communist party.
Yesterday Discover informed me that they couldn’t approve my application for credit because they couldn’t verify data given on the application. I never applied to Discover for credit. Americans are turning to fraud as things tighten economically. I’m not really clear thought on how this fraudster would have gotten hold of any money since the application used my actual address.
next up, democrats will try to ‘cancel’ credit card debt. After all, its probably racist to make people pay their credit card bills.
Very good, I commend you! We became better stewards over our finances, too, when a settlement came through and we were able to pay off the house and our truck. We had already paid off most credit cards and now treat our credit card like you do. We do have a car we are paying off and a leased car, but both are manageable and the lease will be turned in eventually. Living within or, if possible, beneath your means brings peace of mind, which is priceless.
I think there are three distinct phases to getting into debt with credit cards, and the boundary between one and the other is hardly noticed at the time. First, one might use them to purchase items that your income would not allow at the moment. Next, the payments on your cards take so much of your income that you are forced to buy necessities, like groceries, on your cards, or make other payments through cash advances. Finally, you cannot meet your monthly expenses and make the minimum payments on your cards without getting further credit. That is, you are getting new cards to make the payments on the old ones. At that point, your debt balloons and soon enough even new credit is unobtainable.
Well I hope to get a heads up before they cancel it, I’ve got some stuff I want not stuff I need.
Remember being able to write off the credit card interest on your taxes? Showing my age.
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