nidena
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Post by nidena on Nov 28, 2022 10:27:51 GMT -5
Credit card balances jump 15%, highest annual leap in over 20 years, as Americans fall deeper in debtThat's ~$3000 for every adult, teenager, and child in the U.S. Edit: Hit Post too soon. Contrast that with: Black Friday boomed online Customers spent a record $9.1B+ online, per CNBC, citing estimates from Adobe Analytics. Electronics, toys, and fitness equipment sales were all up 200%+ compared to an average October day
48% of online sales were done by phone, up 4% from 2021
BNPL payments were up 78% from the previous week
Adobe expects $11.2B in sales on Cyber Monday, a 5.1% YoY increase
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swamp
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Post by swamp on Nov 28, 2022 10:40:56 GMT -5
when i used to do divorces i was amazed at the amount of credit card debt some people have.
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nidena
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Post by nidena on Nov 28, 2022 10:55:29 GMT -5
It's easy to accumulate, especially as prices increase and other parts of the budget eat up larger and larger pieces of someone's income.
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Bonny
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Post by Bonny on Nov 28, 2022 11:08:34 GMT -5
when i used to do divorces i was amazed at the amount of credit card debt some people have. Yeah, I was in shock to see how much debt my mom was in when she died. $60k in ccs, $40k in back taxes and $300k on the HELOC. The taxes were especially crazy because she was paying less than interest. After nearly 10 years of payments she actually owed nearly double the original debt. She and my dad had filed BK about 10 years before that so the prior debt had been wiped out. It's not something I could ever wrap my head around.
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swamp
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Post by swamp on Nov 28, 2022 11:16:01 GMT -5
When I was in my 20's, one of my good friends got in "deep credit card debt."
It was $3,000. LOL
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Post by minnesotapaintlady on Nov 28, 2022 11:19:32 GMT -5
It's not something I could ever wrap my head around. I can't either. But I was raised with the mentality that if you don't have the money, you don't buy it.
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busymom
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Post by busymom on Nov 28, 2022 11:59:30 GMT -5
What you have to remember is, it's not always the result of a spending problem. Plenty of folks file for bankruptcy due to medical debt. But then, we all know that one person who treat their credit card like it is free cash to be spent...
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haapai
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Post by haapai on Nov 28, 2022 12:32:16 GMT -5
Hmmm...didn't levels of US credit card debt take a huge, historic dive early in the pandemic, perhaps when the first round of Covid relief checks hit? Shouldn't that be somewhere in this article?
Shouldn't it be mentioned that travel boomed this summer and early fall?
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scgal
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Post by scgal on Nov 28, 2022 12:34:12 GMT -5
Wonder why no one can pay their student loans they are too busy paying their cc debt. Hell while the govt is at it lets give every cc debt holder 10k to help ease their burden too. People are so damn irresponsible, but why should they do any different when the govt does the same damn thing. Before the bashing starts as far as govt I mean govt on both sides of the isle.
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nidena
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Post by nidena on Nov 28, 2022 12:57:52 GMT -5
Hmmm...didn't levels of US credit card debt take a huge, historic dive early in the pandemic, perhaps when the first round of Covid relief checks hit? Shouldn't that be somewhere in this article?
Shouldn't it be mentioned that travel boomed this summer and early fall?
Americans paid off a record $83 billion in credit card debt in 2020They did but they still had balances ( By the end of last year, the average household credit card balance fell to $8,089, WalletHub found--from the article ) and then inflation boomed and interest rates increased. I have two cards and they were something like 8% and 9% and now they're 11% and 12%, rounded to nearest whole number. I'm sure many others have rates that are 20+%.
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haapai
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Post by haapai on Nov 28, 2022 13:04:15 GMT -5
FWIW, If your memory of the pandemic is as shoddy as mine, you can click on the third link in the MSN article (wrote in a blog post) and see a nice graphic representation of how sharply US credit card debt fell in late 2020.
ETA. nidena and I were typing at the same time. This post is not a reaction to the post that immediately precedes it.
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Post by The Walk of the Penguin Mich on Nov 28, 2022 13:16:38 GMT -5
Back in 1999, I had about $30k in credit card debt. It only took me 10 years to pay it off, making $40k for a good chunk of that.
I never want to do that again.
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Bonny
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Post by Bonny on Nov 28, 2022 13:23:07 GMT -5
What you have to remember is, it's not always the result of a spending problem. Plenty of folks file for bankruptcy due to medical debt. But then, we all know that one person who treat their credit card like it is free cash to be spent... While I think that's partially right I also think that some people will claim health issues because it's more socially acceptable. Heck I told DM's loan officier that and it was partially true. She was living on the HELOC when she couldn't work due to the two knee surgeries. I wasn't going to say to her lender, yeah Mom spent everything she made, had no savings, had no disability insurance and she had filed BK 10 years before so you shouldn't be surprised she couldn't pay you back.
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Post by minnesotapaintlady on Nov 28, 2022 13:23:51 GMT -5
That's ~$3000 for every adult, teenager, and child in the U.S. I didn't go through and read the article to determine the methodology, but I would think amount collected in interest by CC companies would be a better indicator. Just looking at statement balances, I often carry 3K/month because I run everything through the cards for the convenience (and rewards). I'm sure a lot of people are like that, and then you have those that travel a lot through work putting everything on their cards and getting reimbursed. The no traveling in 2020 would have shown a dip when everyone was staying put due to the travel bans.
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haapai
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Post by haapai on Nov 28, 2022 13:24:09 GMT -5
I looked up my September 30 2021 and September 30, 2022 balances on my credit card. It went from $139 to $970. That's a 550% increase. I've definitely been using the credit card more, especially since the ATM/POS card expired, but I also definitely have the resources to pay it off.
I don't know whether to be concerned about using the plastic more (and not feeling the immediate pain of money leaving me) or elated that I am finally part of a trend.
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nidena
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Post by nidena on Nov 28, 2022 13:31:43 GMT -5
That's ~$3000 for every adult, teenager, and child in the U.S. I didn't go through and read the article to determine the methodology, but I would think amount collected in interest by CC companies would be a better indicator. Just looking at statement balances, I often carry 3K/month because I run everything through the cards for the convenience (and rewards). I'm sure a lot of people are like that, and then you have those that travel a lot through work putting everything on their cards and getting reimbursed. The no traveling in 2020 would have shown a dip when everyone was staying put due to the travel bans. I have a similar curiosity: Are the people who paid off $83B in 2020 the same as those who may have dramatically increased balances now?
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Post by The Walk of the Penguin Mich on Nov 28, 2022 13:33:56 GMT -5
That's ~$3000 for every adult, teenager, and child in the U.S. I didn't go through and read the article to determine the methodology, but I would think amount collected in interest by CC companies would be a better indicator. Just looking at statement balances, I often carry 3K/month because I run everything through the cards for the convenience (and rewards). I'm sure a lot of people are like that, and then you have those that travel a lot through work putting everything on their cards and getting reimbursed. The no traveling in 2020 would have shown a dip when everyone was staying put due to the travel bans. This is a good point. We everything on the Costco card for the 2% cash back and it gets paid off monthly. That amounts to $2000-4000 each month. This includes utilities, gas, groceries, insurance, etc. So depending on when they run their data, a good chunk of people are like us and MPL.
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nidena
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Post by nidena on Nov 28, 2022 13:38:09 GMT -5
I looked up my September 30 2021 and September 30, 2022 balances on my credit card. It went from $139 to $970. That's a 550% increase. I've definitely been using the credit card more, especially since the ATM/POS card expired, but I also definitely have the resources to pay it off.
I don't know whether to be concerned about using the plastic more (and not feeling the immediate pain of money leaving me) or elated that I am finally part of a trend.
I had no CC debt in March of this year. Then there were involuntary and voluntary decisions made, over the past six months, that resulted in $14k now. So, I buckle down again and get it gone again.
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haapai
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Post by haapai on Nov 28, 2022 13:50:56 GMT -5
I didn't go through and read the article to determine the methodology, but I would think amount collected in interest by CC companies would be a better indicator. Just looking at statement balances, I often carry 3K/month because I run everything through the cards for the convenience (and rewards). I'm sure a lot of people are like that, and then you have those that travel a lot through work putting everything on their cards and getting reimbursed. The no traveling in 2020 would have shown a dip when everyone was staying put due to the travel bans. I have a similar curiosity: Are the people who paid off $83B in 2020 the same as those who may have dramatically increased balances now? The blog post that I referenced earlier can't answer that question, but it does show that every single age group dramatically decreased their level of credit card debt in 2020 and then changed directions at pretty much the same time. The oldest age cohort seems to have been the most successful at keeping the balances from creeping up, but there is a startling similarity in the trend lines for all age groups. They change directions at almost exactly the same time.
Information regarding the changes in balances by income can only be imputed by the average income of the zip code of the borrower. It also shows startlingly simultaneous shifts for all imputed income levels. Unfortunately, if you stare at the lines for long enough, the same thing that showed up for age cohort emerges. The folks at the top of the imputed income pile seem to have retained some gains and the story deteriorates as you go down. The folks living in the lowest income quartile of zip codes have definitely increased their balances above where they were at the previous peak.
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nidena
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Post by nidena on Nov 28, 2022 13:57:00 GMT -5
FWIW, If your memory of the pandemic is as shoddy as mine, you can click on the third link in the MSN article (wrote in a blog post) and see a nice graphic representation of how sharply US credit card debt fell in late 2020.
ETA. nidena and I were typing at the same time. This post is not a reaction to the post that immediately precedes it.
That link isn't clickable i.e. there's no link.
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haapai
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Post by haapai on Nov 28, 2022 13:59:00 GMT -5
I looked up my September 30 2021 and September 30, 2022 balances on my credit card. It went from $139 to $970. That's a 550% increase. I've definitely been using the credit card more, especially since the ATM/POS card expired, but I also definitely have the resources to pay it off.
I don't know whether to be concerned about using the plastic more (and not feeling the immediate pain of money leaving me) or elated that I am finally part of a trend.
I had no CC debt in March of this year. Then there were involuntary and voluntary decisions made, over the past six months, that resulted in $14k now. So, I buckle down again and get it gone again. I probably should have been clearer. I've got the cash to pay it off before I have to pay any interest.
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haapai
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Post by haapai on Nov 28, 2022 13:59:55 GMT -5
FWIW, If your memory of the pandemic is as shoddy as mine, you can click on the third link in the MSN article (wrote in a blog post) and see a nice graphic representation of how sharply US credit card debt fell in late 2020.
ETA. nidena and I were typing at the same time. This post is not a reaction to the post that immediately precedes it.
That link isn't clickable i.e. there's no link. I'm lazy. Go to the article that you linked to and click on the third link.
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busymom
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Post by busymom on Nov 28, 2022 14:11:20 GMT -5
We use our credit cards for the doctor, dentist, just about anything, because we have cards that give you nice rewards or rebates. I don't doubt that a lot gets spent during the holidays, but we don't carry a balance.
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swamp
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Post by swamp on Nov 28, 2022 14:26:16 GMT -5
Wonder why no one can pay their student loans they are too busy paying their cc debt. Hell while the govt is at it lets give every cc debt holder 10k to help ease their burden too. People are so damn irresponsible, but why should they do any different when the govt does the same damn thing. Before the bashing starts as far as govt I mean govt on both sides of the isle. You can discharge cc debt in bankruptcy. Generally credit caress don’t capitalize their accumulated interest. Apples and oranges.
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Post by Deleted on Nov 28, 2022 14:33:17 GMT -5
We everything on the Costco card for the 2% cash back and it gets paid off monthly. That amounts to $2000-4000 each month. This includes utilities, gas, groceries, insurance, etc. So depending on when they run their data, a good chunk of people are like us and MPL. And travel. Don't forget travel! I got all kinds of excited e-mails last month about my credit score decreasing because I charged the balance on my May trip on my Costco card last month. Costco responded by increasing my limit, so I took a double hit! I paid it off in full and got congratulatory e-mails telling me that my credit score has gone up. What a surprise. I saw the credit card trap with my Ex. The banks get themselves into a vicious circle, letting people over-extend themselves, then whining that they have to charge high interest rates because of so many defaults. To the Ex, unused credit line was money to spend. I'd make the minimum payment (we did keep separate credit card accounts) and he'd charge it up again. The amount of interest that gets added to the balance gets crazy-high over a period of years. And yet, he got more credit card offers than I did, with higher limits.
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scgal
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Post by scgal on Nov 28, 2022 14:53:16 GMT -5
Wonder why no one can pay their student loans they are too busy paying their cc debt. Hell while the govt is at it lets give every cc debt holder 10k to help ease their burden too. People are so damn irresponsible, but why should they do any different when the govt does the same damn thing. Before the bashing starts as far as govt I mean govt on both sides of the isle. You can discharge cc debt in bankruptcy. Generally credit caress don’t capitalize their accumulated interest. Apples and oranges. Is it though. I'm looking at paying debt as debt. Both debts are high as hell in this country. Both are voluntary: abiet one is supposedly to help you in your future. Yet it seems people struggle in paying them off. I do hold the lending institutions culpable for their predatory ways but ultimately people are the ones responsible. As far as bankruptcy I think it should be hard as hell to get anything discharged.
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Post by The Walk of the Penguin Mich on Nov 28, 2022 17:01:09 GMT -5
We everything on the Costco card for the 2% cash back and it gets paid off monthly. That amounts to $2000-4000 each month. This includes utilities, gas, groceries, insurance, etc. So depending on when they run their data, a good chunk of people are like us and MPL. And travel. Don't forget travel! I got all kinds of excited e-mails last month about my credit score decreasing because I charged the balance on my May trip on my Costco card last month. Costco responded by increasing my limit, so I took a double hit! I paid it off in full and got congratulatory e-mails telling me that my credit score has gone up. What a surprise. I saw the credit card trap with my Ex. The banks get themselves into a vicious circle, letting people over-extend themselves, then whining that they have to charge high interest rates because of so many defaults. To the Ex, unused credit line was money to spend. I'd make the minimum payment (we did keep separate credit card accounts) and he'd charge it up again. The amount of interest that gets added to the balance gets crazy-high over a period of years. And yet, he got more credit card offers than I did, with higher limits. I did forget travel. Those months it gets maxed out, sometimes twice. I max the card out, a payment gets made and it gets maxed out a second time. Viking gives a 3.3% discount on travel, just a bit better than Costco’s 3%.
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Post by The Walk of the Penguin Mich on Nov 28, 2022 17:08:59 GMT -5
I have a similar curiosity: Are the people who paid off $83B in 2020 the same as those who may have dramatically increased balances now? The blog post that I referenced earlier can't answer that question, but it does show that every single age group dramatically decreased their level of credit card debt in 2020 and then changed directions at pretty much the same time. The oldest age cohort seems to have been the most successful at keeping the balances from creeping up, but there is a startling similarity in the trend lines for all age groups. They change directions at almost exactly the same time.
Information regarding the changes in balances by income can only be imputed by the average income of the zip code of the borrower. It also shows startlingly simultaneous shifts for all imputed income levels. Unfortunately, if you stare at the lines for long enough, the same thing that showed up for age cohort emerges. The folks at the top of the imputed income pile seem to have retained some gains and the story deteriorates as you go down. The folks living in the lowest income quartile of zip codes have definitely increased their balances above where they were at the previous peak.
But the trend lines would suggest exactly what happened during travel and all spending during Covid. We didn’t go any place for over a year, nor did I make any flight or hotel reservations, expenses were the bare minimum of what they normally are (no eating out, no activities and less gas) so there was more available cash. When people got out, they started spending more so their monthly balances went higher. During Covid, our normal $2000-4000 monthly Costco charge barely hit $1000, a few times it was under $700.
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Pink Cashmere
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Post by Pink Cashmere on Nov 28, 2022 17:49:44 GMT -5
Well, I am happy to be able to say that after I filed BK over a decade ago, I still only have the 1 cc I was able to get after the dust settled. It has no rewards or perks, and the limit is small. I don’t care.
Even though the events that led to me filing BK honestly were due to medical bills and issues that caused me to lose pay, I don’t ever want to be in that kind of situation and debt again. I just hope and pray that what was a *perfect storm* of events that made my money so funny, was a once in a lifetime type of thing.
I still drive my ‘03 Honda that I bought new and struggled to pay off in 2008 after the shit had hit the fan financially for me. That says a LOT, because I am definitely a car person. But as much as I love cars, I’d rather drive my little old Honda until it just falls apart, than go through what I went through back then again. When Mister bought his Honda, riding in it, I got new car fever so bad I didn’t know what to do with myself, but I got over it because I’d really rather keep my money how it is than pay for a new car.
The only debt I have is mortgage debt. No loans, no cc balances. I’m not even sure if the mortgage for the other house shows on my credit reports since technically, that debt was discharged in BK. I have no idea what my credit score is. I know I should pay attention to those things, if for no other reason than to make sure everything is correct, but I don’t. If push comes to shove, and some crazy shit happens, I already have another house I/we can live in if I/we need to. If my Honda falls apart tomorrow (please God, no) I can just drive my 2010 Jeep Wrangler we bought a couple years ago, until I figure something else out. So, no matter what, I’ll have somewhere to live, and a way to get to work, which means I’m good lol.
Financing a house or a vehicle are the things I think credit really matters for. Well, I guess also insurance rates too. But if I’m not interested in buying another house, and I keep doing okay battling my love for cars, besides insurance rates, what does it matter?
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susana1954
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Post by susana1954 on Dec 4, 2022 22:09:59 GMT -5
My ex and I were in CC hell back in the 1980s and 1990s. I got out, ironically, via the divorce. We did a second mortgage and paid everything off. My half came out of the equity. For those feeling virtuous, how many of you pay those CCs when payment is due as opposed to when the statement closes? You are paying last month's bills with this month's money. Lose your job or have a major expense, and suddenly you can't pay them off. Ditto for those interest-free ones. And Helocs used for stuff other than home improvement are really the same thing as CC debt with better PR. So be a little less shocked.
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