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I propose that credit card debt is simply the earliest signal of "not making enough money to sustain the life you think of as normal." We have not yet come to
by superuser2 10y ago
I propose that credit card debt is simply the earliest signal of "not making enough money to sustain the life you think of as normal."
We have not yet come to terms with the fact that the overwhelming majority of people outside of a tiny sliver of elites are going to be lucky to afford bare subsistence in the years to come. Credit card debt lets us delay confrontation with the reality that wages have not grown enough, employment is not strong enough for most people in middle-class jobs to live the lives we used to think of as middle class.
Of course you reach for plastic before you stop buying groceries.
- nametakenobv 10y agoPlease stop with this heart-breaking narrative about the unequal in income, starving americans. It's about iphones and clothes, not groceries.
- toomuchtodo 10y ago> Nearly half of Americans would have trouble finding $400 to pay for an emergency. http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/ http://www.theatlantic.com/magazine/archive/2016/05/my-secre...
- kdamken 10y agoI'd be interested to see your (or anyone from that article's) monthly spending/expenses and income. Do you have crazy medical bills or student loans that you can't avoid? Do you budget your money out and track every transaction? It sucks to be in that situation, but there are always things you can do to improve it.
- toomuchtodo 10y agoI've edited the comment. The part "I'm one of them" is from the article title.
- kdamken 10y agoGotcha, thanks for clarifying. Congrats on saving that much too! Sounds like you're on track to do very well.
- toomuchtodo 10y agoOnly because I fell hard financially first.
- nametakenobv 10y agoIf they have their CCs maxed out for clothes and bar tabs, of course that's gonna be the case.
- toomuchtodo 10y agoDo you truly believe half of Americans are maxing out their credit cards on bar tabs and clothing? Does that make sense when the majority of bankruptcies are from medical debt?
- mikeash 10y agoI don't think credit card debt is driving people into bankruptcy, mostly. From what I've seen (which isn't a ton, but some), people just build it up slowly buying toys and treats. Eventually they stop, either because they get smarter or just can't get any more credit, and then either sustain the debt or very slowly pay it down. It's hard to go bankrupt from this directly because they're careful not to lend you more than you can pay back. It doesn't always work, of course, but they do a decent job of figuring that out. Note that a lot of medical bankruptcies aren't bankruptcies due to medical bills alone, but are people with insurance who go bankrupt due to a combination of deductibles, additional non-medical expenses related to the illness, and a sudden reduction in their ability to work. Having a bunch of credit card debt instead of a bunch of savings could easily put someone in that situation, so the two probably work together a lot.
- ArkyBeagle 10y agoNo, it's mostly just not allowing for relatively small bumps in the road. A water heater here, a transmission there, next thing you know...
- jandrese 10y agoOr medical bills. It only takes one major illness to ruin your average American family.
- nametakenobv 10y agoI can see that.
- dionidium 10y agoiPhones and new clothes are exactly the kinds of things that the middle classes can't really afford, but think of as normal.
- superuser2 10y ago+1. People who have not yet internalized that they are poor, sustaining to themselves and their children the lie that they are their parents' version of middle class.
- JonFish85 10y agoCredit card debt probably isn't the "earliest" signal of that. We've been running pretty solid federal deficits for going on 40 years now -- that's probably a good indication that people feel that they deserve more than they pay for.
- damptowel 10y agoGovernments have been running deficits for 5000 years, it's how currency is established.
- toomuchtodo 10y agoUS citizens are binging on credit to make up for stagnant wages. That's not a theory, that's a fact. First it was housing, now its credit card and auto loan debt. Fun fact: Subprime auto loan bonds are in a slow motion trainwreck: http://money.cnn.com/2016/03/15/investing/subprime-unpaid-auto-loans-oil-crash/ http://money.cnn.com/2016/03/15/investing/subprime-unpaid-au... http://www.bloomberg.com/news/articles/2016-03-21/this-is-what-s-going-on-beneath-the-subprime-auto-loan-turmoil http://www.bloomberg.com/news/articles/2016-03-21/this-is-wh...
- mac01021 10y agoYou're asserting that, if wages were not stagnant, people would not binge on credit? Maybe that's true, but I doubt it's noncontroversial enough to be declared "fact rather than theory".
- deleted 10y ago[deleted]
- dionidium 10y agoAnalogies from federal budgets to household ones are specious at best
- mac01021 10y agoWhy? In both cases a deficit imposes a burden on our future selves or our descendants.