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One of the more baffling statistics I’ve seen lately is that consumer debt continues to increase and credit card interest rates are at multi year highs despite
by tempsy 7y ago
One of the more baffling statistics I’ve seen lately is that consumer debt continues to increase and credit card interest rates are at multi year highs despite the fed funds rate being at historical lows. Things don’t add up.
- sanxiyn 7y agoDebt increasing when interest rate is low sounds completely normal to me, although credit card interest rate being high is interesting.
- dnadler 7y agoMaybe creditors are having trouble finding attractive returns, so they are lending to riskier individuals. Similar to the 'reach for yield' phenomenon in the bond market.
- arbuge 7y agoMortgage and auto loan debt are probably significantly larger components of consumer debt than credit card debt.
- DuskStar 7y agoSounds like the credit card companies are expecting a vanishing fraction of the people for whom credit card interest is relevant to actually pay them back... (At least among my family, common knowledge is to treat credit cards like debit cards or charge cards - make the full payment, every time, and if you can't make the full payment you shouldn't have made the purchase)
- ferdek 7y agoSame here - I'm using credit card only for extra protection (chargeback and so on) always making the full payment at the end of the period.