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The $1.26 trillion Federal Reserve figure includes both balances paid in full every month and balances accruing interest. Convenience spending by "transactors"
by panarky 2mo ago
The $1.26 trillion Federal Reserve figure includes both balances paid in full every month and balances accruing interest.
Convenience spending by "transactors" (roughly 35% of cardholders) who pay in full every month is something like $200 billion of this.
- fhdkweig 2mo agoDo you have a citation for the 35% number? I wouldn't have thought it was that rare.
- panarky 2mo agoLet me Google that for you ... Ah, here it is https://bpi.com/missing-factors-in-the-cfpbs-analysis-of-rising-credit-card-interest-rates/#:~:text=As%20shown%20in%20Exhibit%204%2C%20the%20share,to%2013%20percent%20over%20the%20same%20period. https://bpi.com/missing-factors-in-the-cfpbs-analysis-of-ris...
- JKCalhoun 2mo agoI'm surprised it's that high. While times have changed, the whole idea of the credit card was to purchase a thing you could not otherwise afford to.
- happytoexplain 2mo agoI'm shocked how small that part of the pie is. That's concerning.
- tokioyoyo 2mo agoThere have been a couple of episodes of Simpsons where “credit card debt” was the subplot. Should give a good idea how “relatable” the experience it was even in the older days. Obviously I’m exaggerating, but you get the idea.
- fhdkweig 2mo agoI can understand how someone right on the edge of disaster (and Homer was always on the edge) would get into debt, but those numbers would imply 2/3 of people are in what I would consider imminent financial collapse. Surely people couldn't exist in that state for lengthy periods of time. Right?
- squigz 2mo agoThey could, and do.
- anonymars 2mo agoIf I remember the stats correctly, I believe in the US the lowest 50% of households combined have maybe 2% of the wealth
- tokioyoyo 2mo agoSounds about right.
- anon7000 2mo agoI mean does it necessarily imply that? You could pay just the minimum payment for a very long time with no consequences, I think. The main problem is you’d hit the credit limit and would have super high interest payments. But even then the minimum payment may be viable. But yeah, reality is that most people are not white collar workers with decent income. HN is probably one of the higher income forums on the internet just because of tech. Definitely a bubble here
- jjav 2mo ago> those numbers would imply 2/3 of people are in what I would consider imminent financial collapse. A suspect a lot of people also carry ongoing credit card debt because they're bad at math or just don't care, not all of them necessarily anywhere near financial collapse. I have a friend who early in their career kept credit card debt for years, because he just liked to pay the minimum. As much as I tried to explain how dumb that was, it didn't help. Still, he was a software engineer making tons of money so nowhere near financial trouble, just financially dumb. But of course there are also lots of people who truly are in credit card debt and can't afford to pay anything but the minimum.
- Fire-Dragon-DoL 2mo agoI don't get how people come up with the idea of paying interests on a credit card. The interests are extortion level, 20%? Wtf? A personal line of credit is like 8%