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Credit is basically mandatory to survive in the US today. Most live paycheck-to-paycheck, wages have been stagnant for decades, and prices have been increasing.

Credit is basically mandatory to survive in the US today. Most live paycheck-to-paycheck, wages have been stagnant for decades, and prices have been increasing. Add in the fact that people are both exhausted from work and that there's fewer domestic "partnerships" that allow division of labor (however that might occur), you have more opportunities for slick marketing and financial jargon to make unappealing terms slide past people.

mc32 2y ago
Even worse, in my opinion, is the proliferation of the buy now pay later schemes even apple are embracing At least with layaway plans, you had delayed gratification.
mgraczyk 2y ago
Most of your specific points are false. In fact, the majority of Americans self-report that they have at least 3 months of emergency savings, and this is backed by savings account data. Credit is necessary for some people, but the actual number is closer to 20% than 50%.
- lenerdenator 2y ago
  Got a source? This article says 58% of Americans say they live paycheck-to-paycheck: https://www.cnbc.com/2024/04/09/most-of-americans-are-living-paycheck-to-paycheck-heres-why.html https://www.cnbc.com/2024/04/09/most-of-americans-are-living... This article mentions 78%: https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/ https://www.forbes.com/advisor/banking/living-paycheck-to-pa...
  - mgraczyk 2y ago
    The definitions of "paycheck-to-paycheck" are different in different surveys. For example, in the second one you linked the question asked was something like "How difficult would it be for you if your paycheck was delayed by one week?" and they took anybody who said more than "not difficult" as "living paycheck to paycheck". My definition is more strict.
    - lenerdenator 2y ago
      I don't know what your definition is, because you didn't provide the requested source. Here's another one showing more than 50%: https://www.prnewswire.com/news-releases/69-of-americans-in-urban-areas-are-living-paycheck-to-paycheck-14-percentage-points-higher-than-suburban-consumers-301832741.html https://www.prnewswire.com/news-releases/69-of-americans-in-...
    - Izkata 2y ago
      There's another one I remember reading at some point (it was definitely older than these, but I don't remember where it was from) where the question was something along the lines of "do you use a credit card for monthly payments" with the assumption of a "yes" meaning they couldn't pay it otherwise and were paycheck-to-paycheck by necessity. It completely ignored the people who use credit cards for the protections or convenience.
    - Sohcahtoa82 2y ago
      The Forbes article linked above shows that 80% of Americans have $2,000 or less in savings. That's 80% of everyone, not just people living paycheck to paycheck. That directly contradicts your claim that the majority has 3 months of emergency savings unless you're so out of touch to think that $2,000 is enough to last people 3 months.
      - mgraczyk 2y ago
        These are self reported numbers, and contradict the numbers from the federal reserve, individual banks, and credit card companies. My main problem with the claim is this. If credit were required by the majority of people, how can it be the case that fewer than 50% of people maintain a balance on any card?
  - verteu 2y ago
    Just FYI, I recommend the Fed's "Report on the Economic Well-Being of U.S. Households" for metrics like this. Some stats: https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-banking-credit.htm#:~:text=past%2012%20months.-,Credit%20Cards,-People%20use%20credit https://www.federalreserve.gov/publications/2024-economic-we... > Eighty-two percent of adults had a credit card in 2023. They were nearly evenly split between the people who paid off their balances in each of the previous 12 months and people who carried balances from month to month at least once in the prior year. Just about one-quarter said they carried a balance most of the time during the prior 12 months. > Fourteen percent of people used BNPL ["buy now, pay later", an alternative to credit cards] in the prior 12 months, up 2 percentage points from 2022. https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-overall-financial-well-being.htm https://www.federalreserve.gov/publications/2024-economic-we... > Near the end of 2023, 72 percent of adults were at least doing okay financially, meaning they reported either "doing okay" financially (39 percent) or "living comfortably" (33 percent). The rest reported either "just getting by" (19 percent) or "finding it difficult to get by" (9 percent)... The 72 percent of adults doing at least okay financially was essentially unchanged from 2022 yet was down 6 percentage points from the recent high of 78 percent in 2021 (figure 1). https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-expenses.htm https://www.federalreserve.gov/publications/2024-economic-we... > Table 17. Largest emergency expense individuals could handle right now using only savings > under $100 (18%) > $100–$499 (14%) > $500–$999 (10%) > $1,000–$1,999 (10%) > over $2,000 (48%) (Which I find this hard to reconcile with the following from the same page:) > In 2023, 54 percent of adults said they had set aside money for three months of expenses in an emergency savings or "rainy day" fund—unchanged from 2022 but down from a high of 59 percent of adults in 2021.
sojsurf 2y ago
I disagree with the statement that credit is basically mandatory. The issues you raised may be real, but borrowing money does not solve any of them, it just hides them. My experience is that credit cards are predatory and offer an easy alternative to basic fiscal responsibility: Living within your means (more humbly than you might want), knowing what expenses you should expect and planning for them. Utility bills, rent, taxes are predictable. Even most car repairs should not be an emergency. If you buy a car, or know anyone that has ever owned a car, you can confidently know that you will have unexpected car-related expenses. It happens to everyone and it should not be a surprise. If you own a car, immediately start putting some money aside so that when you get a flat, or crack the windshield, or need a new bearing, it's not an emergency. If you have children, teach them money management. It's one of the most valuable skills for adult life. Additionally, talk to your local school district about teaching financial literacy courses!
- lenerdenator 2y ago
  > My experience is that credit cards are predatory and offer an easy alternative to basic fiscal responsibility: Living within your means (more humbly than you might want), knowing what expenses you should expect and planning for them. There's a wrinkle here: basic fiscal responsibility currently exists at odds with the reality most people need to exist within to be content. 30 years ago, a middle-aged person in the United States could generally (though not always) count upon financial progress, and this mirrored most of American history. Financial progress is a synonym for societal progress in many ways. That's no longer the case. A middle-aged person today is less likely to own property, have adequate savings, be debt-free, etc. than their parents were. Credit has become a way to numb the fact that more and more of the money never trickles down. The fact that it's available and so widely used points to a society that's looking for that easy alternative, but not to basic fiscal responsibility; instead, one to basic access to the value created by labor.
  - sojsurf 2y ago
    > basic fiscal responsibility currently exists at odds with the reality most people need to exist within to be content. Thanks for pointing that out. There are expenses that have gone up significantly compared to the average income. At the same time, the bar for "contentment" has gone up significantly I live in the Midwest. Many of these neighborhoods have homes in the 1200 sq ft range (111 m^2), with two bedrooms, maybe a third small one, one bathroom and a basement. Talking to older neighbors, it used to be normal for a family with five or more children to live in a house like this. Cars were simpler and more affordable. There was one phone line per household, not per person. There was no internet access or cable TV subscription. You mowed your lawn with a mechanical, human powered device. There's nothing wrong with having a bedroom for each child, but is it necessary for contentment? Definitely not.
Arnt 2y ago
On the other hand: https://news.ycombinator.com/item?id=40680380 https://news.ycombinator.com/item?id=40680380 Ignore the story, look at the comments. The commenters aren't stupid, they've enough brains to master English grammar, I'm sure they know how many Americans live paycheck-to-paycheque. I don't understand the attitude. It must be some sort of apples-plus-oranges addition that's very different from mine. I just don't get it.

mc32 2y ago

Even worse, in my opinion, is the proliferation of the buy now pay later schemes even apple are embracing At least with layaway plans, you had delayed gratification.

mgraczyk 2y ago

Most of your specific points are false. In fact, the majority of Americans self-report that they have at least 3 months of emergency savings, and this is backed by savings account data. Credit is necessary for some people, but the actual number is closer to 20% than 50%.

lenerdenator 2y ago
Got a source? This article says 58% of Americans say they live paycheck-to-paycheck: https://www.cnbc.com/2024/04/09/most-of-americans-are-living-paycheck-to-paycheck-heres-why.html https://www.cnbc.com/2024/04/09/most-of-americans-are-living... This article mentions 78%: https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/ https://www.forbes.com/advisor/banking/living-paycheck-to-pa...
- mgraczyk 2y ago
  The definitions of "paycheck-to-paycheck" are different in different surveys. For example, in the second one you linked the question asked was something like "How difficult would it be for you if your paycheck was delayed by one week?" and they took anybody who said more than "not difficult" as "living paycheck to paycheck". My definition is more strict.
  - lenerdenator 2y ago
    I don't know what your definition is, because you didn't provide the requested source. Here's another one showing more than 50%: https://www.prnewswire.com/news-releases/69-of-americans-in-urban-areas-are-living-paycheck-to-paycheck-14-percentage-points-higher-than-suburban-consumers-301832741.html https://www.prnewswire.com/news-releases/69-of-americans-in-...
  - Izkata 2y ago
    There's another one I remember reading at some point (it was definitely older than these, but I don't remember where it was from) where the question was something along the lines of "do you use a credit card for monthly payments" with the assumption of a "yes" meaning they couldn't pay it otherwise and were paycheck-to-paycheck by necessity. It completely ignored the people who use credit cards for the protections or convenience.
  - Sohcahtoa82 2y ago
    The Forbes article linked above shows that 80% of Americans have $2,000 or less in savings. That's 80% of everyone, not just people living paycheck to paycheck. That directly contradicts your claim that the majority has 3 months of emergency savings unless you're so out of touch to think that $2,000 is enough to last people 3 months.
    - mgraczyk 2y ago
      These are self reported numbers, and contradict the numbers from the federal reserve, individual banks, and credit card companies. My main problem with the claim is this. If credit were required by the majority of people, how can it be the case that fewer than 50% of people maintain a balance on any card?
- verteu 2y ago
  Just FYI, I recommend the Fed's "Report on the Economic Well-Being of U.S. Households" for metrics like this. Some stats: https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-banking-credit.htm#:~:text=past%2012%20months.-,Credit%20Cards,-People%20use%20credit https://www.federalreserve.gov/publications/2024-economic-we... > Eighty-two percent of adults had a credit card in 2023. They were nearly evenly split between the people who paid off their balances in each of the previous 12 months and people who carried balances from month to month at least once in the prior year. Just about one-quarter said they carried a balance most of the time during the prior 12 months. > Fourteen percent of people used BNPL ["buy now, pay later", an alternative to credit cards] in the prior 12 months, up 2 percentage points from 2022. https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-overall-financial-well-being.htm https://www.federalreserve.gov/publications/2024-economic-we... > Near the end of 2023, 72 percent of adults were at least doing okay financially, meaning they reported either "doing okay" financially (39 percent) or "living comfortably" (33 percent). The rest reported either "just getting by" (19 percent) or "finding it difficult to get by" (9 percent)... The 72 percent of adults doing at least okay financially was essentially unchanged from 2022 yet was down 6 percentage points from the recent high of 78 percent in 2021 (figure 1). https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-expenses.htm https://www.federalreserve.gov/publications/2024-economic-we... > Table 17. Largest emergency expense individuals could handle right now using only savings > under $100 (18%) > $100–$499 (14%) > $500–$999 (10%) > $1,000–$1,999 (10%) > over $2,000 (48%) (Which I find this hard to reconcile with the following from the same page:) > In 2023, 54 percent of adults said they had set aside money for three months of expenses in an emergency savings or "rainy day" fund—unchanged from 2022 but down from a high of 59 percent of adults in 2021.

sojsurf 2y ago

I disagree with the statement that credit is basically mandatory. The issues you raised may be real, but borrowing money does not solve any of them, it just hides them. My experience is that credit cards are predatory and offer an easy alternative to basic fiscal responsibility: Living within your means (more humbly than you might want), knowing what expenses you should expect and planning for them. Utility bills, rent, taxes are predictable. Even most car repairs should not be an emergency. If you buy a car, or know anyone that has ever owned a car, you can confidently know that you will have unexpected car-related expenses. It happens to everyone and it should not be a surprise. If you own a car, immediately start putting some money aside so that when you get a flat, or crack the windshield, or need a new bearing, it's not an emergency. If you have children, teach them money management. It's one of the most valuable skills for adult life. Additionally, talk to your local school district about teaching financial literacy courses!

lenerdenator 2y ago
> My experience is that credit cards are predatory and offer an easy alternative to basic fiscal responsibility: Living within your means (more humbly than you might want), knowing what expenses you should expect and planning for them. There's a wrinkle here: basic fiscal responsibility currently exists at odds with the reality most people need to exist within to be content. 30 years ago, a middle-aged person in the United States could generally (though not always) count upon financial progress, and this mirrored most of American history. Financial progress is a synonym for societal progress in many ways. That's no longer the case. A middle-aged person today is less likely to own property, have adequate savings, be debt-free, etc. than their parents were. Credit has become a way to numb the fact that more and more of the money never trickles down. The fact that it's available and so widely used points to a society that's looking for that easy alternative, but not to basic fiscal responsibility; instead, one to basic access to the value created by labor.
- sojsurf 2y ago
  > basic fiscal responsibility currently exists at odds with the reality most people need to exist within to be content. Thanks for pointing that out. There are expenses that have gone up significantly compared to the average income. At the same time, the bar for "contentment" has gone up significantly I live in the Midwest. Many of these neighborhoods have homes in the 1200 sq ft range (111 m^2), with two bedrooms, maybe a third small one, one bathroom and a basement. Talking to older neighbors, it used to be normal for a family with five or more children to live in a house like this. Cars were simpler and more affordable. There was one phone line per household, not per person. There was no internet access or cable TV subscription. You mowed your lawn with a mechanical, human powered device. There's nothing wrong with having a bedroom for each child, but is it necessary for contentment? Definitely not.

Arnt 2y ago

On the other hand: https://news.ycombinator.com/item?id=40680380 https://news.ycombinator.com/item?id=40680380 Ignore the story, look at the comments. The commenters aren't stupid, they've enough brains to master English grammar, I'm sure they know how many Americans live paycheck-to-paycheque. I don't understand the attitude. It must be some sort of apples-plus-oranges addition that's very different from mine. I just don't get it.