Posted on 02/07/2024 2:57:24 PM PST by SeekAndFind
* Collectively, Americans owe $1.13 trillion on their credit cards, according to a new report from the Federal Reserve Bank of New York.
* Higher prices have largely caused consumers to spend down their savings and lean on credit cards to make ends meet.
* Now, young adults, who are also burdened by high levels of student loan debt, are increasingly falling behind on the payments, the New York Fed found.
Americans now owe a collective $1.13 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York. This is an all-time high.
Credit card balances increased by $50 billion, or roughly 5%, in the fourth quarter of 2023, the New York Fed found. Credit card delinquency rates also jumped — particularly among younger millennials, or borrowers between the ages of 30 and 39, who are burdened by high levels of student loan debt.
"This signals increased financial stress, especially among younger and lower-income households," said Wilbert van der Klaauw, economic research advisor at the New York Fed.
(Excerpt) Read more at msn.com ...
Soon to be followed by mortgage relief for the "historically marginalized."
“If you pay at least your “statement balance” every month, it doesn’t matter. If you don’t ... you’re getting hosed.”
Yeah I donno.
Some of my numbers:
Credit card debt interest charge - 22%
Investment Account interest charge - 11%
Mortgage interest rate - 1.86%
Investment account appreciation rate (2023) - 114%
So do I do the Dave Ramsey thing and pay off debt, or do the Robert Kiyosaki thing and max out my earnings?
A lot of ppl are doing the Robert Kiyosaki wealth building tract.
Tons of ppl build wealth with debt. The first thing us schlebs have is credit card and mortgage debt to be used to leverage investments.
People are idiots.
Can you reliably make > 22% rate of return on your investments, year after year?
I doubt it. One or two bad years can really trash the long-term statistics. Early 2020 was a buying opportunity. For me. For some people, it was a disaster.
Credit card debt is evil. IMO.
Car loans are almost as evil. IMO.
Mortgages are tolerable. IMO.
Leveraged investments are gambling. IMO.
Famous financial advisors who don’t even know you are to be taken with a grain of salt.
You know your situation, and how much financial risk you’re able to take.
YMMV.
Bidenomics in action. Don’t let them tell you otherwise.
Agreed on all points.
Some salient responses:
-I have enough in savings to pay off all high-interest debt should the market stall. I.e. investment returns are less than the interest on my debt.
-I buy used, high-mileage cars and keep going (lower insurance, parts cost, etc.).
-I have a superb mortgage refinance rate. It will be the last debt I pay off.
-Yes, leveraged debts are a huge gamble. The only thing that gives me confidence is the gov’s inability to cut spending -meaning the Treasury will have to issue more debt to cover it, thereby further eroding dollar value (inflation). Having majority investments in assets and favoring that over debt ensures my wealth appreciates faster than debt -which gets reduced with inflation.
I don’t listen to advisors much. Maybe Charlie Munger. I really like his take on financing. It’s pretty close to mine. He was a great man. Lucky, shrewd and pragmatic. A good fiduciary.
I’m just following the advice of: when you find a good investment plow into it and ride it till it fades.
The only debt we ever had was our mortgage and that we paid off decades ago. When I read these articles, I wonder if I live on the same planet.
You and I may live on planet reality and fiscal responsibility, but those virtues have been drummed out of most of the population.
But the leftists will use our assets to bail out themselves and their parasites anyway, so we got that coming.
“The banks don’t care, they are only on the hook for 10% of what they loan out (fractional reserve banking).”
If a bank loan is defaulted on, the bank has to write off the TOTAL amount plus expenses. They lose the total amount. Nobody comes in and pays the bank the 90% you refer to.
This is great news, it proves Bidenomics is working exactly as planned and expected. I doubt the ones getting royally screwed by their voting habits will change though. Oh well, You can’t fix stupid.
People paying 22% interest to finance their household expenses are not doing it to create investment capital. Most of them don’t have 500 dollars in their savings account.
Cc balances increased by 5% in just one quarter? That’s a lot!
If you see a line at your bank…….get in it.
My balance before the bill comes is $425, And that’s high for me. I pay my Amazon Chase card in full every month, the $425 is a different card.
In other words the bank literally creates most of the money it loans out od thin air as an accounting gimmick, less their reserve requirements.
Most money isn't printed by the government, it's created through bank loans.
Being in debt is a terrible thing. I was a debt slave in my 30’s because I was stupid. Climbed out of that and now only have a mortgage and small RV payment. Have enough savings to pay both off if I want to and still live comfortably. Folks need to quit worrying about keeping up with the Joneses.
$425 is nothing compared to that poor sucker that has $1.13 trillion on their credit cards....
Sorry to hear that and see those awful numbers.
no brainer to me. Get out of debt and stay out of debt for everything except a home mortgage and pay that off early.
The entire business structure of this country is based on good credit. Only an idiot (Hello, Joe ...) or a traitor (Yo' Bama ...) would suggest it.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.