Welcome to the 21st Century America!

@TheDawn
This post summarizes my pov:

deaddog said:
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.
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The fact that only 35% pay their credit balance in full confirms that the way you use it is not the general rule but the exception. So don't minimize the number of Americans that got/get in financial trouble because of generous credit card supply.

46% need at least one year to pay off the balance. In other words these people spent money they don't have. They need one year or longer to recover financially from the gap in their budget. For these people credit cards are the road to bankruptcy. They have no advantages at all from having a credit card.
 
Anyway, a wifely tale back in the 90s. Japanese credit card ABS was the best performing asset. Men spent money lavishly in strip clubs and golf entertainments, etc, and defaulted on payments. The bankers got collection agencies went to their houses and to tell the wives, bingo, full payments. Then of course, loan sharks were making good unsecured returns.
 
virtusa said:
@TheDawn
This post summarizes my pov:



The fact that only 35% pay their credit balance in full confirms that the way you use it is not the general rule but the exception. So don't minimize the number of Americans that got/get in financial trouble because of generous credit card supply.
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This is misleading. At any one time when you take a survey, there will always be people carrying a balance, whether intentionally or because they missed a payment. This is no indication of anything especially the cause of financial trouble of Americans. I myself have carried balances (when there are promotional offers) and missed payments but I am not in any financial trouble, I assure you.

virtusa said:
46% need at least one year to pay off the balance. In other words these people spent money they don't have. They need one year or longer to recover financially from the gap in their budget. For these people credit cards are the road to bankruptcy. They have no advantages at all from having a credit card.
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Again you are extrapolating. Just because people are taking longer time to pay off credit card debts doesn't mean they are necessarily having financial trouble or not able to pay. They might be doing it on purpose because they are earning a higher rate of return than the interest rate they are incurring. Credit cards can be used as a method of financing you know that? You can get promotional offers from credit card issuers where the interest rate is much lower than the 20% regular rate and people might be taking advantage of that to save money to earn a better rate of return elsewhere. You can't be looking at statistics and drawing conclusions based on them without knowing the reason behind the statistics.

I think Europe is just set up differently without an elaborate and in-depth credit card structure as in North America so no offense, but its views and exploration of the credit cards in terms of its functions and capabilities is quite limited.
 
mervyn said:
Anyway, a wifely tale back in the 90s. Japanese credit card ABS was the best performing asset. Men spent money lavishly in strip clubs and golf entertainments, etc, and defaulted on payments. The bankers got collection agencies went to their houses and to tell the wives, bingo, full payments. Then of course, loan sharks were making good unsecured returns.
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Strip clubs, yes but "golf entertainments"? That's not something that the wives should care about.
 
"Welcome to 21st Century America"- clearly someone is still stuck in mid 20th Century America when credit was not as overwhelmingly overflowing, as well as their naivete to what other countries/economies decide is best for them.

But thanks especially of late to artificially FED induces ZIRP almost everyone is partaking.
 
TheDawn said:
Strip clubs, yes but "golf entertainments"? That's not something that the wives should care about.
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not when you have a gang outside the house to shame the family, indebtedness is not something of comfort for most of the people.
 
mervyn said:
not when you have a gang outside the house to shame the family, indebtedness is not something of comfort for most of the people.
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Oh yes I forgot indebtedness is like a huge deal in Asian cultures especially if you got indebted for things like strip club expenses.
 
VicBee said:
How the Fed’s new instant payments system could change the banking industry
Felix Salmon, author of Axios Markets

Your money is not quite as money as you might think.

Why it matters: The U.S. government is trying to change that, to make it more real, more useful, and more accessible.

The big picture: The Platonic ideal of money is cash in your pocket. It can be transferred any time, anywhere, to anyone, irreversibly — and the recipient always receives the exact same amount of money as you are spending.

  • The money in your checking account, by contrast, is much less reliable.
  • It basically goes into hibernation every evening and all weekend; it can also take three days or sometimes much longer to arrive somewhere you're sending it.
Driving the news: FedNow, the Fed's instant-payments system, is arriving later this month, to complement a private-sector real-time payments system from The Clearing House. Both of them work 24/7, and transfer money in seconds, making checking accounts significantly more money-like (assuming they're not frozen, of course).

  • Don't expect any kind of fireworks when FedNow arrives. It's only going to be supported by 57 organizations to start with, and many of them are going to be in "receive only" mode — which is to say, their customers will be able to receive money, but not send it.
  • In countries like India or Brazil, the central bank mandated use of the official instant-payments system; use of FedNow, by contrast, is entirely optional. That said, now that the Fed is encouraging uptake, expect instant payments to become much more popular in coming years.
  • "When the Fed says something happens, it happens," Modern Treasury CEO Dimitri Dadiomov tells Axios. "Banks don’t say no to the Fed."
Between the lines: Instant payments aren't great for banks. After all, if your money leaves your account on Monday and arrives in your vendor's account on Thursday, either the sending or the receiving bank is earning interest on it in the interim — but not passing interest on to either customer.
  • 24/7 payments also exacerbate the risk of bank runs. When y0u can transfer up to $1 million out of your account instantly, even when the bank is closed, that means "the rate of deposit flight could be much faster," Kevin Jacques, a partner at Cota Capital, tells Axios.
  • Peer-to-peer payments are also commonly used for illicit activities, which naturally worries banks.
On top of that, FedNow isn't a consumer-facing product like Venmo or Zelle; it's more behind-the-scenes plumbing. In order for the U.S. to catch up to India, a lot of financial services companies will have to do a lot of work — and spend seven-digit sums, even at small institutions — updating their apps and their infrastructure to support the new technology.

How it works: In the first instance, expect FedNow to be used mostly by large corporations.

  • Gig-economy employers like to be able to pay workers immediately and per job, for instance. Even employees with full-time jobs very much appreciate being able to get paid everything they're owed today, rather than waiting until the 15th or the 30th of the month.
The bottom line: FedNow is a huge advance in U.S. payments plumbing, but it's still likely to be a couple of years before you'll be able to, say, move money instantly from a savings account at one bank to a checking account at another.
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OMG!!! This is DISASTERS waiting to happen. Instant transfer = instant hacking. In a country where an entire oil pipeline network can be brought to its knees by a ransomware attack, and the only way to neutralize the attack was just to pay up, this instant payment system is an open invitation for attack. I can just see hackers all around the world scurrying around and gearing up. And they are using it to transfer millions of $$'s between companies. OMG!! &facepalm* China, are you listening?? Forget about attacking Equifax, this is free money right here, one shot and there is your 5% GDP growth!!
 
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