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Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

wsj.com

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Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#11

Post by markhall »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

I would venture to guess that 'your type of debt' [like mine] is actually the minority. Most Americans actually carry a balance, hence why the card companies continue to push/prey as they do.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#12

Post by fbdjfhhcbd »

It's interesting to watch how the financial industry is pushing debt as a substitute for income. That way people can still purchase the products from companies listed on the equities market, without those companies needing to spend nearly as much on labor overhead. It makes you wonder how sustainable our economy is when it's based on borrowing instead of earnings...

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#13

Post by hyperpape »

mkj wrote: post #6

What's the amount carried over each month (and interest paid)? That seems the more interesting figure.

Given that this is > $12,000 for a family of four, I'm guessing that it's not that much less, and at least half of it is carried over month to month, if not more.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#14

Post by toomuchtodo »

TheOtherHobbes wrote: post #10
askyourmother wrote: post #3

Best part is credit card debt is typically unsecured - spend, consume, enjoy, stick up middle finger when repayment is due. Those who do repay will of course sub those who don't over the long course in the variable rates and fees.

Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage. In the UK you'll also be put through collections, which can include attempts to force you to sell a property - if you own one - and/or most of your possessions to repay the debt. Credit cards may not be secured, but lenders have risk management divisions who make some attempt to estimate default rates. The biggest prob…

> Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage.

I walked away from an underwater mortgage on a townhouse. It only caused my dropped my credit score ~100 points, and was eligible for another mortgage after 3 years (My credit card provider didn't blink, and had no problem allowing me to keep a charge card with high five figures of credit available).

The repercussions of credit default are highly overrated.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#15

Post by losteric »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

Compared to the average American, your credit card usage is incredibly unusual. The average home carries around $15,000 in credit card debt alone.

I find this to be extremely worrying... especially considering the average college graduate starts working with $25,000 in student loans.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#16

Post by shanecleveland »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

I wondered the same thing. My balance is typically <$1000, but I've never had an interest-accruing balance.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#17

Post by empath75 »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

It's pretty great having a few grand in cash to throw around every month, but man do you live in a bubble if you think 'most' people do that.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#18

Post by rco8786 »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

> I feel like the majority of credit card debt is the type of "debt" that I incur every month.

This is doubtful. The average U.S. household carries about $15k in credit card debt.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#19

Post by tremon »

I can't read the article, but the title is a non-sequitur: overdrawing is not inevitably tied to bank cards. Other societies have things like a direct debit infrastructure which allows consumers to use plastic cards without the risk of overdrawing. That doesn't mean it's impossible though: many Dutch banks allow the customer to choose his overwithdrawal limit. Mine is set to zero.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#20

Post by harryh »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

How do you pay your rent on a credit card? I'd imagine you do that to get rewards of some kind?
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