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Many folks carry zero credit month to month and still use a credit card. You're giving away free money by not using it.

toomuchtodo 2y ago
You're assuming these consumers of credit card products can pay off their cards (transactors) when the data shows, broadly, that the consumer is stressed financially. Consumers are relying on credit cards because they cannot afford not to (revolvers). US Consumer Debt Delinquency Hits Highest in Almost Five Years - https://www.bloomberg.com/news/articles/2025-02-13/us-consumer-debt-delinquency-hits-highest-in-almost-five-years https://www.bloomberg.com/news/articles/2025-02-13/us-consum... | https://archive.today/ivRqd https://archive.today/ivRqd - February 13, 2025 Record Share of Americans Pay Only Minimum on Credit Card Bills - https://news.bloomberglaw.com/banking-law/record-share-of-americans-pay-only-minimum-on-credit-card-bills https://news.bloomberglaw.com/banking-law/record-share-of-am... - Jan. 22, 2025 Philadelphia Fed: Card Balances and Delinquencies Continue Upward Trajectory; Mortgage Originations Stagnate - https://www.philadelphiafed.org/surveys-and-data/2024-q3-large-bank https://www.philadelphiafed.org/surveys-and-data/2024-q3-lar... - January 22, 2025 St Louis Fed FRED: Consumer Loans: Credit Cards and Other Revolving Plans, All Commercial Banks (CCLACBW027SBOG) - https://fred.stlouisfed.org/series/CCLACBW027SBOG https://fred.stlouisfed.org/series/CCLACBW027SBOG (credit card balances total ~$1T outstanding as of this comment)
- s1artibartfast 2y ago
  You are still looking at a minority to define a universal trend. Some consumers may be stressed. That doesn't explain why credit cards use has dominated across all income ranges for decades. It seems like you are trying to shoehorn a pet issue into an unrelated question. Edit: you still seem to be missing the question. It isn't why credit debt is so high. The question is why so many people use credit cards. What you are saying may be true, but it is answering it an entirely different question. >People would use debit cards if they had the funds. This is the part that simply isn't true. The rich use credit cards too. Less than half of credit card owners carry a balance from month to month.
  - deleted 2y ago
    [deleted]
  - toomuchtodo 2y ago
    Ah yes, "my pet issue." I suppose I am not the chief economist at Moody's. It must the purchase protection and the rewards, not the unsecured credit. https://time.com/6957322/why-credit-card-debt-is-high/ https://time.com/6957322/why-credit-card-debt-is-high/ > The higher cost of everything from housing to high-tops to haircuts are a major culprit. Although inflation has moderated since it peaked in June 2022, Americans—particularly lower-income families—are relying more on credit cards to cope with the sticker shock. > “They used credit card debt to supplement their incomes to maintain their purchasing power,” says Mark Zandi, chief economist at Moody’s Analytics. > A few years ago, low interest rates plus a host of pandemic-era programs—stimulus payments, enhanced food stamp benefits, pauses on student loan payments and eviction proceedings—made this new math work for families’ budgets. But those financial supports have been discontinued, and for borrowers who were barely treading water financially, these programs couldn’t have been eliminated at a worse time. Credit card rates are high because they can be, if you need financing you have nowhere else to go except perhaps a payday lender or other hard money source. This is why there is recent talk of capping interest rates at 10%. People would use debit cards if they had the funds, they don't, which is also why overdraft fees were a source of billions of dollars in fees for commercial banks. S.381 - 10 Percent Credit Card Interest Rate Cap Act - https://www.congress.gov/bill/119th-congress/senate-bill/381 https://www.congress.gov/bill/119th-congress/senate-bill/381 Big banks have drastically cut overdraft fees, but customers still paid $2.2 billion last year - https://www.cnbc.com/2024/02/09/jpmorgan-chase-wells-fargo-cut-overdraft-revenue-to-2-billion-in-2023.html https://www.cnbc.com/2024/02/09/jpmorgan-chase-wells-fargo-c...
- lupusreal 2y ago
  From what I've read (not your links), roughly about 40% of Americans with credit cards don't carry a balance month to month. That's not most, but it is many. Which is what was said: > MANY folks carry zero credit month to month Even if 40% is 10x too high, and I'm pretty sure it isn't, 4% of all credit card holders is still a hell of a lot of people. As far as I can tell you haven't actually contradicted the claim.

You're assuming these consumers of credit card products can pay off their cards (transactors) when the data shows, broadly, that the consumer is stressed financially. Consumers are relying on credit cards because they cannot afford not to (revolvers). US Consumer Debt Delinquency Hits Highest in Almost Five Years - https://www.bloomberg.com/news/articles/2025-02-13/us-consumer-debt-delinquency-hits-highest-in-almost-five-years https://www.bloomberg.com/news/articles/2025-02-13/us-consum... | https://archive.today/ivRqd https://archive.today/ivRqd - February 13, 2025 Record Share of Americans Pay Only Minimum on Credit Card Bills - https://news.bloomberglaw.com/banking-law/record-share-of-americans-pay-only-minimum-on-credit-card-bills https://news.bloomberglaw.com/banking-law/record-share-of-am... - Jan. 22, 2025 Philadelphia Fed: Card Balances and Delinquencies Continue Upward Trajectory; Mortgage Originations Stagnate - https://www.philadelphiafed.org/surveys-and-data/2024-q3-large-bank https://www.philadelphiafed.org/surveys-and-data/2024-q3-lar... - January 22, 2025 St Louis Fed FRED: Consumer Loans: Credit Cards and Other Revolving Plans, All Commercial Banks (CCLACBW027SBOG) - https://fred.stlouisfed.org/series/CCLACBW027SBOG https://fred.stlouisfed.org/series/CCLACBW027SBOG (credit card balances total ~$1T outstanding as of this comment)

s1artibartfast 2y ago
You are still looking at a minority to define a universal trend. Some consumers may be stressed. That doesn't explain why credit cards use has dominated across all income ranges for decades. It seems like you are trying to shoehorn a pet issue into an unrelated question. Edit: you still seem to be missing the question. It isn't why credit debt is so high. The question is why so many people use credit cards. What you are saying may be true, but it is answering it an entirely different question. >People would use debit cards if they had the funds. This is the part that simply isn't true. The rich use credit cards too. Less than half of credit card owners carry a balance from month to month.
- deleted 2y ago
  [deleted]
- toomuchtodo 2y ago
  Ah yes, "my pet issue." I suppose I am not the chief economist at Moody's. It must the purchase protection and the rewards, not the unsecured credit. https://time.com/6957322/why-credit-card-debt-is-high/ https://time.com/6957322/why-credit-card-debt-is-high/ > The higher cost of everything from housing to high-tops to haircuts are a major culprit. Although inflation has moderated since it peaked in June 2022, Americans—particularly lower-income families—are relying more on credit cards to cope with the sticker shock. > “They used credit card debt to supplement their incomes to maintain their purchasing power,” says Mark Zandi, chief economist at Moody’s Analytics. > A few years ago, low interest rates plus a host of pandemic-era programs—stimulus payments, enhanced food stamp benefits, pauses on student loan payments and eviction proceedings—made this new math work for families’ budgets. But those financial supports have been discontinued, and for borrowers who were barely treading water financially, these programs couldn’t have been eliminated at a worse time. Credit card rates are high because they can be, if you need financing you have nowhere else to go except perhaps a payday lender or other hard money source. This is why there is recent talk of capping interest rates at 10%. People would use debit cards if they had the funds, they don't, which is also why overdraft fees were a source of billions of dollars in fees for commercial banks. S.381 - 10 Percent Credit Card Interest Rate Cap Act - https://www.congress.gov/bill/119th-congress/senate-bill/381 https://www.congress.gov/bill/119th-congress/senate-bill/381 Big banks have drastically cut overdraft fees, but customers still paid $2.2 billion last year - https://www.cnbc.com/2024/02/09/jpmorgan-chase-wells-fargo-cut-overdraft-revenue-to-2-billion-in-2023.html https://www.cnbc.com/2024/02/09/jpmorgan-chase-wells-fargo-c...
lupusreal 2y ago
From what I've read (not your links), roughly about 40% of Americans with credit cards don't carry a balance month to month. That's not most, but it is many. Which is what was said: > MANY folks carry zero credit month to month Even if 40% is 10x too high, and I'm pretty sure it isn't, 4% of all credit card holders is still a hell of a lot of people. As far as I can tell you haven't actually contradicted the claim.