Apparently a lot would have to declare bankruptcy.
Half in US Lack the Cash to Cover a Surprise $400 Bill
https://www.bloomberg.com/news/arti...ash-to-cover-a-surprise-400-expense#xj4y7vzkg
Welcome to the 21st Century America!
- Thread starter VicBee
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Apparently a lot would have to declare bankruptcy.
Half in US Lack the Cash to Cover a Surprise $400 Bill
https://www.bloomberg.com/news/arti...ash-to-cover-a-surprise-400-expense#xj4y7vzkg
2023 Credit Card Debt Statistics | LendingTree
Unfortunately, most people with an active credit card account don’t always pay their bills in full. A November 2022 LendingTree survey found that just 35% of cardholders say they always pay their credit card balance in full every month, while 65% say they carry a balance at least some of the time. Nearly half (46%) of those cardholders who have card debt say it would take them at least a year to pay it off.
Unfortunately, most people with an active credit card account don’t always pay their bills in full. A November 2022 LendingTree survey found that just 35% of cardholders say they always pay their credit card balance in full every month, while 65% say they carry a balance at least some of the time. Nearly half (46%) of those cardholders who have card debt say it would take them at least a year to pay it off.
Yup, you don't have to go to court mandated detox to be an addict.
So don't spend so much on credit cards. Ta da!!! If you can't afford to pay for it with cash, then you shouldn't buy it just because you can pay with credit cards. There you go. The problem with people is they feel because they don't have to pay for it right away, they don't have to pay for it ever. If they treat credit cards like cash, then there is no problem. You get to earn a full month of interest and all the rewards like cashback (imagine you can earn $$ by spending and not paying for it for a full month!!!) and free merchandise at the same time. This is what I mean by credit cards is a noble way to manage our finance; all it requires is planning and discipline, something you need to succeed in life anyway especially if you are a trader.
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Ok that's not the credit cards' problem. It's the people's problem. You can get paper cut when using paper so are you going to stop using paper forever?
I think that was Vic's point. The American public is addicted to easy credit. The whole system is based on buy now pay later. You can have instant gratification for only god knows how many easy payments at 20 plus percent interest.
Can't make a payment, switch to another card company for an introductary rate that expires in a couple months.
Spend money you don't have, on stuff you don't need, to impress people you don't like. It's the American way!!
Here's a small correction to the Bloomberg article:
So, 66% of those polled claim they would pay a $400 emergency expense without incurring further charges; the rest would have to pay more than $400 or woudn't pay the expense. That's still pretty pitiful.
The good news is if you can't afford an extra $400, you probably can't afford to declare bankruptcy.
https://www.creditkarma.com/advice/i/how-much-cost-filing-bankruptcy
That's not addiction with easy credit. It's a discipline problem. Those introductory rate promotional offers are FANTASTIC!! How do you think I survived the hyperinflation for the past 2 years? LOL I lost count of how many credit cards I have applied and owned and I have no debt problem. There is no problem with instant gratification. Just treat credit cards like instant payment. That's it.
Ok so in Europe, credit cards are set up very differently from how they are set up in America. In America, there is no such thing as some kind of reset. That 10th day reset is a rip-off!! In America, you can max your credit cards however you want. If you are over the limit, some cards charge you an overlimit fee some don't even charge you that fee; they will just outright decline you. And now with the interest rate being so high, you can invest in term deposits and savings accounts that pay you 5%+ interest rate. IB even pays you 4.58% on idle cash balance after the first 10K so that's an effective rate of about 4% or so. That's 4% lost by paying right away with cash or debit card! On a $2000 monthly purchase as you mentioned, that's 2000 X 0.04 X 1/12 = $6.66. Not a lot but if you paid with debit card, you earned $0!! $6.66 is still better than $0. Over a year, that $6.66 X 12 = $80. That's a nice sushi dinner for two if you don't drink and that's not counting all of the compound interest. Plus you are missing out on cashback rewards, free merchandises, purchase insurance, travel insurance and all kinds of perks that come with using credit cards. So many times I ordered stuff online and those unscrupulous sellers never delivered or delivered me crap and refused to refund me the money and I was able to get my purchases refunded by the credit card company. If I had paid with a debit card, I would've been screwed big time, having no recourse against those sellers that just basically robbed me.
And there is another thing, in order to compensate themselves for the merchant fees that they would have to pay the credit card company, merchants have already added the merchant fees into the prices that they charge so if you are not using credit cards, you are basically subsidizing all of the credit card users by paying the higher price and yet not enjoying any benefit with using the credit cards.
I tell you credit cards are the best thing that's ever happened to consumers. It gives you flexibility, security of accounts against theft and fraud and perks that are counter-inflationary. If you are not using it, you are not only missing out but are paying for others who do.
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I agree with you that credit cards are a great way to manage your payments. Use the perks, enjoy the convenience and safety, and pay the balance each month.
So Americans are not addicted to easy credit, they just don't have the discipline to responsibly manage the credit that is made available to them. Do you think that the credit card companies are taking advantage of an undisciplined population by making credit so easy to obtain?
In my lifetime I have seen credit get easier and easier to obtain. At one time there was quite a process to go through to be approved for an American Express card. (Pre Visa and Mastercard)
Now I get weekly mailings addressed occupant to telling me I'm pre-approved for this or that credit card. Way too easy for someone who lacks discipline.