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*poor Americans are falling behind on their credit card debt I really truly hate that anyone in the country has credit card debit.

kubb 2y ago
You hate it but companies love it because people having easier access to spending makes them better consumers I guess?
- hiddencost 2y ago
  I'd argue credit card debt actually makes people better laborers, by forcing them to work more. If someone is spending 20% of their income servicing their debt, they aren't spending more, they're working more for the same amount of goods and services.
  - kubb 2y ago
    Exploitation is the backbone of the strong American economy.
  - maximus-decimus 2y ago
    I guess that's one way to have the poor make less than minimum wage.
- Retric 2y ago
  CC debt is a net negative spending by consumers. The difference between outstanding credit card debt each year is far less than the money spent servicing credit car debt. Even if you adjust for defaults, it’s a huge drain on people’s spending. Very specific industries like amusement parks see some gain, but overall the economy would be far better off with significantly smaller credit card limits.
  - kubb 2y ago
    Maybe assuming that you would spend as much with and without the credit, but I think removing the barrier to consumption, and buying on impulse and thinking later is the key. If you’re forced to save up for an expense, you have much more time to reconsider it.
    - Retric 2y ago
      At the beginning sure, the average 21 year old spends more because of CC’s. But most people don’t die or default young. If someone doesn’t pay off that debt by ~28 they’ll spend more in interest than whatever the item was and still need to keep paying down debt / keep paying interest. Take that same person and remove the impulse buying at 21 and by 28 they will have saved that money to make those same purchases and not have to service debt after that point or try to dig themselves out of a hole. Even if they end up saving the money for years, it’s likelihood to end up as a down payment on a house or something. Because the economy isn’t just individual purchases it’s the average activity across generations at each individual moment.
      - kubb 2y ago
        If you’re analyzing it that broadly then the interest on the CC debt will also be a profit for the bank which will distribute it across its workers and shareholders, and those people will also use it for consumption. It’s just a wealth transfer from the poor, and impulsive to the rich and clever.
        Retric 2y ago
        Some shareholders in public companies are guaranteed to be outside the US. Similarly wealthy people are more likely to spend money on goods and services outside the US.
CamperBob2 2y ago
It's a tool like any other. Wear a helmet.
- hiddencost 2y ago
  We can educate people. We can protect them. There's a massive disparity in competence between the people selling credit cards and the people using them. That's not intrinsic, it's done to them.
  - charlie0 2y ago
    At the same time, I don't want to live in a world where others are doing things for "my safety".
    - desert_rue 2y ago
      But you already do. Your meat is processed to a certain standard. Your foodstuffs may only have a certain percentage of contaminants. Your vehicle must meet certain safety standards. The buildings you traverse through meet building codes. I could go on.
    - text0404 2y ago
      yeah you do. or at least, the people who make your comfortable life possible do: https://www.osha.gov/young-workers/real-stories https://www.osha.gov/young-workers/real-stories. it's wild that's it's only taken a single generation for people to forget the struggles of the generations before them and to take those hard-won rights for granted.
    - WalterBright 2y ago
      I presume you meant others preventing you from doing things "for your safety?" i.e. the nanny state?
  - WalterBright 2y ago
    It pays (!!) to pay attention in math class.
Dalewyn 2y ago
Credit card debt is fine when it is used properly; you can defer paying a charge for almost 2 months with no interest depending on when its statement due date is. The problem is revolving credit card debt, which comes from not paying statement balances in full and you end up accruing interest. That is spending beyond your means, which is bad whether the debt comes from revolving lines of credit or otherwise. Don't spend more than you can afford and keep money earmarked to pay statements in full when they come due. A credit card that is used properly has an effective interest rate of 0% and helps make your finances easier to manage.
- charlie0 2y ago
  This. Everyone I've seen in high levels of debt got that way because they have access to credit. If it's not credit cards, it's going to be loans of other kinds. You can't really stop people from going into debt, it's a mental thing.
  - bluSCALE4 2y ago
    If you're taught it early, then people have a chance. The problem is that credit is predatory. If you're barely scraping by but paying your minimum, I believe most lenders will slowly increase your limit as long as you're current. Or if not them, another lender will give you a line of credit and you can just transfer it or accumulate more. Now, even banks got into the game with even asking you if you'd like to finance something after you've bought it! If you buy something for 300, they'll show you an option to pay 3 installments of 100 instead with penalties if you fail to pay on time. So what some people do, instead of saving and buying one thing for 300, they buy 3 things for 900 and pay for them monthly. The problem is when you can't pay, now you're screwed. Credit is scary. Life is also crazy expensive. I can't imagine how the next generation will feel once they come of age and things are soul crushingly expensive. Inflation has no bounds. You know how the yen is like a penny? That wasn't always the case. The yen was a dollar and cents were sen. Inflation got so high so fast, that domination just went away. We're not far from cents going away either, god forbid with 100 becomes the new dollar.
    - 2y ago

kubb 2y ago

You hate it but companies love it because people having easier access to spending makes them better consumers I guess?

hiddencost 2y ago
I'd argue credit card debt actually makes people better laborers, by forcing them to work more. If someone is spending 20% of their income servicing their debt, they aren't spending more, they're working more for the same amount of goods and services.
- kubb 2y ago
  Exploitation is the backbone of the strong American economy.
- maximus-decimus 2y ago
  I guess that's one way to have the poor make less than minimum wage.
Retric 2y ago
CC debt is a net negative spending by consumers. The difference between outstanding credit card debt each year is far less than the money spent servicing credit car debt. Even if you adjust for defaults, it’s a huge drain on people’s spending. Very specific industries like amusement parks see some gain, but overall the economy would be far better off with significantly smaller credit card limits.
- kubb 2y ago
  Maybe assuming that you would spend as much with and without the credit, but I think removing the barrier to consumption, and buying on impulse and thinking later is the key. If you’re forced to save up for an expense, you have much more time to reconsider it.
  - Retric 2y ago
    At the beginning sure, the average 21 year old spends more because of CC’s. But most people don’t die or default young. If someone doesn’t pay off that debt by ~28 they’ll spend more in interest than whatever the item was and still need to keep paying down debt / keep paying interest. Take that same person and remove the impulse buying at 21 and by 28 they will have saved that money to make those same purchases and not have to service debt after that point or try to dig themselves out of a hole. Even if they end up saving the money for years, it’s likelihood to end up as a down payment on a house or something. Because the economy isn’t just individual purchases it’s the average activity across generations at each individual moment.
    - kubb 2y ago
      If you’re analyzing it that broadly then the interest on the CC debt will also be a profit for the bank which will distribute it across its workers and shareholders, and those people will also use it for consumption. It’s just a wealth transfer from the poor, and impulsive to the rich and clever.
      - Retric 2y ago
        Some shareholders in public companies are guaranteed to be outside the US. Similarly wealthy people are more likely to spend money on goods and services outside the US.

CamperBob2 2y ago

It's a tool like any other. Wear a helmet.

hiddencost 2y ago
We can educate people. We can protect them. There's a massive disparity in competence between the people selling credit cards and the people using them. That's not intrinsic, it's done to them.
- charlie0 2y ago
  At the same time, I don't want to live in a world where others are doing things for "my safety".
  - desert_rue 2y ago
    But you already do. Your meat is processed to a certain standard. Your foodstuffs may only have a certain percentage of contaminants. Your vehicle must meet certain safety standards. The buildings you traverse through meet building codes. I could go on.
  - text0404 2y ago
    yeah you do. or at least, the people who make your comfortable life possible do: https://www.osha.gov/young-workers/real-stories https://www.osha.gov/young-workers/real-stories. it's wild that's it's only taken a single generation for people to forget the struggles of the generations before them and to take those hard-won rights for granted.
  - WalterBright 2y ago
    I presume you meant others preventing you from doing things "for your safety?" i.e. the nanny state?
- WalterBright 2y ago
  It pays (!!) to pay attention in math class.

Dalewyn 2y ago

Credit card debt is fine when it is used properly; you can defer paying a charge for almost 2 months with no interest depending on when its statement due date is. The problem is revolving credit card debt, which comes from not paying statement balances in full and you end up accruing interest. That is spending beyond your means, which is bad whether the debt comes from revolving lines of credit or otherwise. Don't spend more than you can afford and keep money earmarked to pay statements in full when they come due. A credit card that is used properly has an effective interest rate of 0% and helps make your finances easier to manage.

charlie0 2y ago
This. Everyone I've seen in high levels of debt got that way because they have access to credit. If it's not credit cards, it's going to be loans of other kinds. You can't really stop people from going into debt, it's a mental thing.
- bluSCALE4 2y ago
  If you're taught it early, then people have a chance. The problem is that credit is predatory. If you're barely scraping by but paying your minimum, I believe most lenders will slowly increase your limit as long as you're current. Or if not them, another lender will give you a line of credit and you can just transfer it or accumulate more. Now, even banks got into the game with even asking you if you'd like to finance something after you've bought it! If you buy something for 300, they'll show you an option to pay 3 installments of 100 instead with penalties if you fail to pay on time. So what some people do, instead of saving and buying one thing for 300, they buy 3 things for 900 and pay for them monthly. The problem is when you can't pay, now you're screwed. Credit is scary. Life is also crazy expensive. I can't imagine how the next generation will feel once they come of age and things are soul crushingly expensive. Inflation has no bounds. You know how the yen is like a penny? That wasn't always the case. The yen was a dollar and cents were sen. Inflation got so high so fast, that domination just went away. We're not far from cents going away either, god forbid with 100 becomes the new dollar.
  - 2y ago