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Yeah, but that explanation runs afoul of "why is it better during the pandemic?". Those "emergencies of some kind" are in fact no less likely now than they wer
by newacct583 6y ago
Yeah, but that explanation runs afoul of "why is it better during the pandemic?". Those "emergencies of some kind" are in fact no less likely now than they were in January (unemployment is of course much worse!). Yet credit card debt has been going down. It doesn't add up.
My money is still on the "the pandemic shut down vacations and boat purchases" argument. Obviously some people need to float emergencies on cards, but by numbers that's not where the money was actually going.
- gbear605 6y agoOne part is that while unemployment is up, a number of large costs are down. Obviously, costs like transportation don’t have to be paid for. On too of that, evictions are suspended so rent payments can be leased and many loans (including mortgages) are pausing minimum payments. Since these big costs are temporarily gone, the remaining income can often cover the remaining costs plus pay off existing debt. Of course, when rent payments and mortgage minimum payments resume, that effect will undo itself.