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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

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.

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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...

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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...