4 ms·

The United States has $1.08T cumulative credit card debt. Somehow, we've managed to give trillions away to business owners for fucking up their own finances, b

The United States has $1.08T cumulative credit card debt. Somehow, we've managed to give trillions away to business owners for fucking up their own finances, but individuals should be left to rot in the sun under insanely usurious rates. I'm not saying it's right. I'm just saying that the only reason that one set of bad decisions gets alleviated and the other one doesn't is because of who donates what. Wiping out that balance would also obliterate a lot of retail banks.

astrange 3y ago
The US does not have historically high credit card debts right now, and it isn't particularly high relative to incomes either. I think part of it might be that credit cards added planning features that have guaranteed fees to compete with BNPLs.
- sp332 3y ago
  Isn't the US at record high levels of credit card debt right now?
  - astrange 3y ago
    Not relative to income/GDP, which is how you'd know what can actually be paid off. https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N There was an uptick in failure to pay credit card bills recently (don't have a graph) but that just means it went from "unusually low" to "same as 2019".
    - devwastaken 3y ago
      GDP calculations in the U.S. are not relevant to debt holders. It would be like saying everyone in the U.S. is wealthy when it's the top 1% that own the vast majority of that wealth.
      - astrange 3y ago
        That is not /more/ true in 2023 than it was in 2019, so it isn't a problem for a quick look at trends. I would've linked a median household graph if I had one, but there are some median numbers here and they're good; keyword is "leverage ratio". https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf (Also, you can't compare GDP and wealth, and income inequality has been decreasing in the US in the last few years.)
        sp332 3y ago
        "U.S. income inequality grew through pandemic years" https://www.reuters.com/world/us/us-income-inequality-rose-3-years-through-2022-fed-data-shows-2023-10-18/ https://www.reuters.com/world/us/us-income-inequality-rose-3...
        astrange 3y ago
        Story is wrong about this, I think they misread it. See Dube: https://x.com/arindube/status/1724147807563477440 https://x.com/arindube/status/1724147807563477440 https://www.nber.org/papers/w31010 https://www.nber.org/papers/w31010 It also might be a difference in wages vs. income, because income counts welfare programs and those were unusually generous (but temporary) in 2020; we should bring that back but it's not due to the economy getting worse. But you can see it says debt ratios are low. > Median household leverage - measuring a family's total debt against its total assets - sank to the lowest in 20 years at 29.2%. Meanwhile, the median payment-to-income ratio dropped to a record-low 13.4%, and the fraction of families with payment-to-income ratios greater than 40% fell 0.9 percentage point to 6.5%, also a record low.

astrange 3y ago

The US does not have historically high credit card debts right now, and it isn't particularly high relative to incomes either. I think part of it might be that credit cards added planning features that have guaranteed fees to compete with BNPLs.

sp332 3y ago
Isn't the US at record high levels of credit card debt right now?
- astrange 3y ago
  Not relative to income/GDP, which is how you'd know what can actually be paid off. https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N There was an uptick in failure to pay credit card bills recently (don't have a graph) but that just means it went from "unusually low" to "same as 2019".
  - devwastaken 3y ago
    GDP calculations in the U.S. are not relevant to debt holders. It would be like saying everyone in the U.S. is wealthy when it's the top 1% that own the vast majority of that wealth.
    - astrange 3y ago
      That is not /more/ true in 2023 than it was in 2019, so it isn't a problem for a quick look at trends. I would've linked a median household graph if I had one, but there are some median numbers here and they're good; keyword is "leverage ratio". https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf (Also, you can't compare GDP and wealth, and income inequality has been decreasing in the US in the last few years.)
      - sp332 3y ago
        "U.S. income inequality grew through pandemic years" https://www.reuters.com/world/us/us-income-inequality-rose-3-years-through-2022-fed-data-shows-2023-10-18/ https://www.reuters.com/world/us/us-income-inequality-rose-3...
        astrange 3y ago
        Story is wrong about this, I think they misread it. See Dube: https://x.com/arindube/status/1724147807563477440 https://x.com/arindube/status/1724147807563477440 https://www.nber.org/papers/w31010 https://www.nber.org/papers/w31010 It also might be a difference in wages vs. income, because income counts welfare programs and those were unusually generous (but temporary) in 2020; we should bring that back but it's not due to the economy getting worse. But you can see it says debt ratios are low. > Median household leverage - measuring a family's total debt against its total assets - sank to the lowest in 20 years at 29.2%. Meanwhile, the median payment-to-income ratio dropped to a record-low 13.4%, and the fraction of families with payment-to-income ratios greater than 40% fell 0.9 percentage point to 6.5%, also a record low.