"A recent Bankrate survey found that 47% of credit cardholders carry a balance month to month. 60% of those carrying card balances have been in credit card debt for at least a year."
This sounds pretty scary. But I also wonder what they mean by retail credit cards. Does that include retailers who offer 24 months interest free on a big purchase when opening the card?
> * Does that include retailers who offer 24 months interest free on a big purchase when opening the card?*
Yes, it would because that's an ongoing/carried balance.
And you're right.. a better analysis would be: how many people continue carrying a balance after their introductory rate goes away?
Because retail credit cards have the highest rates by far:
> The average retail credit card annual percentage rate (APR) hit a new record high of 28.93% this year, up from 26.72% in 2022 and 24.35% in 2021, according to Bankrate’s annual Retail Cards Study out Monday. 28.93% APR is well above the national average, which clocks in at 20.71%
Don't forget about the most insidious aspect of these retail cards. Once that promotional no-interest period expires, your balance gets hit with all the accrued interest from the promotional period.
So, anyone thinking of taking advantage of these promotions take heed: Pay off the entire balance before the promotion expires!
To further complicate things, the entire "Buy Now, Pay Later" industry does NOT report to credit agencies, etc until someone is late on payments (not sure how many days late).
Therefore, there's an entire pile of debt that also is invisible to these metrics.
That’s depressing, particularly given the recent trend of car loans having longer and longer terms, disposing with the conventional wisdom of no greater than three years.
Affirm, Klarna, and other services for deferred payment are just credit card debt in a different form. They’re used to encourage impulse buys like expensive event tickets.
Seriously go to an expensive event like the Cowboys v 49ers game or Taylor Swift concert and look around. It’s not a bunch of millionaires pow wowing around.
> But when they looked at young people who were born after 1980, in the 1980s and 1990s, their wealth benefit was much smaller. And for certain cohorts, for Black and Latino-headed families, that college wealth premium had disappeared altogether. So a college grad wasn’t amassing any more wealth over their lifetime than a high school grad.
Essentially, total income ≠ total lifetime earnings. Wealth is what people really care about when comparing (non)college wages. Fact is, college is a big gamble now. For more explanation, read past the cited quote. (Or listen to the entire podcast, if you can! It's really interesting!)
Your linked article doesn't propose that the earning potential of college graduates isn't higher, it just states that people think the tuition price might not be worth it.
College educated adults absolutely have a substantially higher earning potential on average.
When my $500/month student loan payments kick back in, you better bet I'm not going to be spending that $500/month on toys. This is about absolute dollars spent.
It sounds like you're mad that you voluntarily took someone else's money and are expected to repay it? Of course, if you take a loan, you'll have to make future financial plans to budget less for frivolous expenditures
I'm not mad about anything, or arguing policy about student loans. I'm just stating a fact - spending will decrease when people have less cash to spend. Why is that controversial?
It wasn’t “fast spending”, it was spending on necessities, but the necessities cost 60-70% more. It’s not like people have more money to spend, most of this is borrowed spending that people are forced into. Cc debt chart I bet is skyrocketing. And household savings are probably declining at a fast pace.
It’s be expected in a period of >0% inflation, most of that debt is going to be valued less in 100 years so it’s best to take it on now before the economy booms again and inflation gets back up to 70s-80s levels.
Even the government pays above the (current level of) inflation and it has to refinance a big chunk of its debt in the next 1-3 years. Personally, I highly doubt the government spending is efficient enough for this. As for the average Joe, card debt is really expensive (20+%). You will not get repeat of the 70s with the current debt levels and aging population, so your bet is effectively a hyperinflation scenario.
All the anecdotal evidence I get is all topsy turvy. Unemployed brother who works in tech tells me he's now got recruiters reaching out to him again. Friends who work in tech sales say that they're struggling to sell. Everyone in general keeps complaining about prices and inflation. Every city keeps breaking home price records.
I don't think anyone understands this market or even this economy anymore.
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[ 3.9 ms ] story [ 86.1 ms ] threadhttps://www.wate.com/investigations/retail-credit-cards-apr-...
This sounds pretty scary. But I also wonder what they mean by retail credit cards. Does that include retailers who offer 24 months interest free on a big purchase when opening the card?
Debt to income would probably be a better metric?
Yes, it would because that's an ongoing/carried balance.
And you're right.. a better analysis would be: how many people continue carrying a balance after their introductory rate goes away?
Because retail credit cards have the highest rates by far:
> The average retail credit card annual percentage rate (APR) hit a new record high of 28.93% this year, up from 26.72% in 2022 and 24.35% in 2021, according to Bankrate’s annual Retail Cards Study out Monday. 28.93% APR is well above the national average, which clocks in at 20.71%
Ref: https://www.foxbusiness.com/economy/retail-credit-card-rates...
So, anyone thinking of taking advantage of these promotions take heed: Pay off the entire balance before the promotion expires!
Don't include them: you're missing all the people who transform into high debt carriers.
Include them: you sweep in all the people who set an automatic payment to pay it off with a couple months to spare and forget about it.
Therefore, there's an entire pile of debt that also is invisible to these metrics.
https://money.com/average-car-payment-record-high/
Most of the "consumer debt reaches all time high" events are explained by a larger economy and inflation making the numbers bigger than 2019.
Seriously go to an expensive event like the Cowboys v 49ers game or Taylor Swift concert and look around. It’s not a bunch of millionaires pow wowing around.
I have opinions about this policy but I’ll leave them for another forum
This isn't true.[1]
[1] https://www.nytimes.com/2023/09/20/podcasts/the-daily/is-col...
> But when they looked at young people who were born after 1980, in the 1980s and 1990s, their wealth benefit was much smaller. And for certain cohorts, for Black and Latino-headed families, that college wealth premium had disappeared altogether. So a college grad wasn’t amassing any more wealth over their lifetime than a high school grad.
Essentially, total income ≠ total lifetime earnings. Wealth is what people really care about when comparing (non)college wages. Fact is, college is a big gamble now. For more explanation, read past the cited quote. (Or listen to the entire podcast, if you can! It's really interesting!)
College educated adults absolutely have a substantially higher earning potential on average.
I think you may be trying to make/respond to an ideological argument that I don't think that post is making.
Edit: Why disagree? I think it's important to see the whole picture and not just the parts we want to see. https://finance.yahoo.com/news/us-cant-grow-way-33-021833651...
Is that what individuals and governments are spending the money on?
I don't think anyone understands this market or even this economy anymore.