This is a rehash of a rehash of that other article somewhere else on the Lemmys from the other day. This huge percentage of people falling behind amounts to a ~.5% increase from 2020->now. POINT FIVE PERCENT from like 5.5% to 6%.
Link closer to source data: https://archive.is/345KW
Also from that link:
NOTES: Delinquency is defined as the share of people having credit card accounts with debt that is 30 days or more past due.
So like, people could have been super distracted because America is dying, or it’s summer and they’re traveling, or the news made them forget, or whatever, and it just happened to make a hiccup that looks scary when put in percent of percent terms.
POINT FIVE PERCENT from like 5.5% to 6%.
Actually that’s called a 0.5 percentage points increase and a 9 percent increase (because 6 ÷ 5.5 = 1.09). The distinction is important, but even the media gets it wrong often.
sounds like they are spending above thier means. top earners, shouldnt have problems living comfortably at all, seems like they are buying things,eating out all the time.
They should stop putting avocado on toast maybe then they’ll afford a new yacht
crypto is all the craze for some reason, plus the WSB meltdowns on reddit.
From the article after defeating the paywall: “Delinquencies on such debts from those making at least $150,000 annually”. That’s not really serious yacht money. In some states that isn’t even upper-middle-class. It is enough to be delusional about perceived wealth though, right up until your job lays you off and you have to shell out to move for another job.
No paywall https://archive.is/hUjVt
So in Europe I have a credit card connected to my savings account. When I buy something I get a debt on my card that is automatically paid each Monday. It’s basically just a short buffer that let’s me review the transactions but I don’t really accumulate any debt. How does that work in USA? How do people end up with so much credit card debt?
When I buy something I get a debt on my card that is automatically paid each Monday
That’s interesting. Which country if you don’t mind? Here in Switzerland my bank still gives me a monthly credit card bill in the e-banking interface, which I can then settle from my account. Or I can pre-fill the credit card if I want to (useful if you’re planning holidays and want to boost the available monthly limit for example). I think I could also set up direct debit, to settle the bill from the account automatically, but that would still happen on a monthly cycle.
I wish I could do it weekly, or even daily. In the US it’s monthly. To be completely honest, I wish credit cards didn’t exist at all. They’re a tax on the financially illererate, and the fact that financially responsible people can gain an essentially free 1.5% (or more) cash back isn’t enough reason for them to exist. I’d happily forgo the cash back to be rid of them.
Cannot you get a charge card in US?
essentially free 1.5%
Cashbacks aren’t free, obviously. The merchant pays for it, which means that they factor it in to their pricing.
Yeah, free isn’t the right way to put it, but I’m not sure what other word to use, considering that most places don’t have different pricing for debit/credit (God bless Winco for not accepting credit).
Our credit cards are attached to bank accounts for monthly payments.
Credit cards companies in the US encourage putting all your expenses on the card to get cash back bonuses and other perks. They only require minimum monthly payments, and whatever carries over month to month is charged crazy high interest rates. Like over 25%.
Do they somehow encourage paying only the minimum each month? I think what I’m asking is if people tend to pay everything at the end of the month and have 0 credit card debt at beginning of each month or does everyone have some debt all the time for some reason?
I get it that if you don’t have enough money to cover your daily expenses you will just start accumulation more and more debt but what if you make more money than you spend? People just pay it right away, right?
I personally pay mine off every month, but I am more fortunate than many. I think a lot of people fall behind on their bills.
People have to prioritize rent and utilities every month just to stay off the streets. Then food, healthcare, and other essential expenses need to be taken care of. Anything that can’t be paid for out of pocket goes on the credit card, and since you only need to make a minimum payment on a credit card, a lot of people will do that to keep their heads above water until next month rolls around.
It’s a vicious cycle and once that interest gets added in you are really only paying down the interest and not reducing the principal.
It seems to me that a lot of US people use credit cards to smoothen over larger purchases, so if you buy say a guitar for your hobby it doesn’t come all for this month’s budget but you plan to pay it off over multiple months. Often, credit card companies also encourage this behavior, giving short term low interest loans. But the overall market in the US is way more volatile than in Europe, so in the months you are paying off (your guitar, that fancy holiday, the tickets to a show…) you could lose your job, or the interests on your house mortgage could change significantly. And you are screwed.
Overall, Europeans tend to dislike credit unless it’s in the format of a mortgage, while it is a much more widespread form of payment in the US (and many other places). So, to most of your questions the answer is: most people have some credit card debt at all times.
That’s how it works in the US if you’re financially responsible. If not, you pay the minimum payment which is financing the remaining balance at extortionate rates that amount to never paying off the debt.
And you are incentivised and/or tricked into paying only the minimum payment to ensure that you go into debt.
That’s the whole point of a credit card: to enslave people via debt.
The bank WOULD NOT HAVE CREATED IT FOR ANY OTHER REASON.
By not having any savings to pay off the debt they just accrued, so their debt increases from interest…?
It’s never been about how much you earn; it’s always been about being willing to live beyond your means.
What do I do when a tiny apartment and food is getting beyond my means? The cost of damn near everything fucking tripled in the past 6 years or so, and I got a 7% raise last year.
Most Americans are getting priced out of the market, and it’s only a matter of time that the house of cards our government calls an economy falls.
Be homeless, work harder. /s
No, it’s about how much you earn too.
Listen, I think I get your point, that even high earners are wage slaves. Doctors and lawyers exit college with decades of debt.
But you can’t say it was never about how much you earn. Some people, and I’ve been in this spot, can’t buy groceries. High earning wage slaves will have decades of debt, but food isn’t an issue.
Bullshit. Last job I had before being layed off years ago was better than most and now two years later. After crushing medical bills, and the increase in EVERYTHING , we have months where food was low.
I spent more time forgaing than shopping the last three months because food is too fucking expensive. I’m glad I grew up even poorer or we would have been in an even worst place for my family. Most don’t though
Thses sweeping statements show the real issue.
Your fighting from the viewpoint that people who worked hard to get even a little out of poverty are at fault
It’s the government and ceos who are. So stop fighting those fighting your same battles.
Live beyond our means. What dumb statement. Food. rent. Every nickel and dime hidden charge from every ducking corp, health insurance, car insurance home insurance, unfair taxation aimed at keeping anyone not mega rich in shackles …
Means. We don’t have means. We have allowances.
Yeah.
Stop that.
People shouldn’t have to worry about that. There’s more than enough for everyone if people weren’t such greedy pigs
Then shame people without knowing their plight.
Ever pay further medical bills of not just your wife and kids but your mom when her medicaid and Medicare wouldnt?
How about instead of shaming people you shut up and listen to the stories. Get your head out of your own bubble and realize g see what’s happening.
This isn’t about living beyond ones means
Its that the corps decide your means and worth.
I think you’ve gone and taken my simple statement exactly backwards.
How much we make is comparative. It’s a fiction imposed by those at the top. By the same people who want the ratio to always be that we spend more than we earn.
But no matter who we are, if we don’t spend more than we earn, we don’t end up in debt to the rich. It’s just that for an increasing proportion of the population, this is becoming impossible.
No, I know what your saying. I stand by what i wrote.
You’re simply out of touch.
Or maybe costs suddenly increased and people had no time to adjust to their new means. “Living beyond your means” is such a dumb phrase in this context. It puts the onus on individuals instead of things like inflation, price gouging, tariffs and costs of living. I guess everyone should be living in one bedroom apartments and eating rice and beans everyday so they live within their means(this is hyperbole). People don’t deserve any luxury just the bare minimum to live and keep working for their overlords.
That assumes your means are constant and your spending isn’t, but this situation is the opposite: long term spending items (mortgage, car debt, significant inflation…) and means that dropped by losing jobs or pay raises that do not match inflation.
I’m not sure if I agree with this but I’m willing to discuss.
I could default on all my debts that are beyond my means tomorrow, but due to privilege I would still have a roof over my head and be able to put food on the table.
I don’t think that is common and, as such, not everybody has the luxury or privilege of living beyond their means.
Am I wrong?
A roof over your head can be subjective. Many high earners are not satisfied with “a roof over their head”, they want it in the good neighborhood, with a pool, many rooms etc. High earners spend a lot more on regular things too, like food (A brands, fancier shops, more take-out), gadgets, traveling a lot and very far etc. If high earners can’t pay their bills, it’s likely partially because they are too deep into keeping up with the Jones’s, suck at handling money or both. It’s not common but is possible to go from being high earning to living under a bridge in just a few months, even if you owned your roof.
I could default on all my debts that are beyond my means tomorrow
But how did you manage to get debt that is above your means? If you take out a loan, for example, don’t they check if you can afford it?
They check if you can afford it “right now”, but the situation could change: a kid, an emergency, inflation, loosing your job, inflation… have i talked about inflation? Or the loan rates could change too
Yeah, but you can lie. Half the time places don’t even ask for proof for some reason.
Or, yeah, but I could lose income tomorrow (especially with how fragile the job market is right now).
I got a loan back in January and a month later lost my highest paying contract job. I’ve since replaced it, but - shit can happen for sure.
Trumps
recessiondestruction
