re: Percentage of Americans that carry credit card debt?

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Found out this weekend that a close friend of mine who seemed to have their life together has over 50k in CC debit. He casually asked me about it and was astounded that we had 0 debit besides normal bills and our mortgage.

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I knew someone that had something like this. Mind blowing

It really is amazing the amount of debt people will incur/keep to "afford" a lifestyle so they can keep up with their friends incurring/keeping the same amount of debt.

LINK to Fred revolving credit

What could possibly go wrong.

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No idea why you would think that. Do you interact with people? Like ever?

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I don’t think any people I closely interact with as friends have any credit card debt. Of my close circle of friends one drives an 18 year old truck, one drives a nine year old truck and I drive a truck with 170k miles on it. I don’t know the year model of the last close friend, ut it’s at least 10 years old (had it as long as I have known him) and I I can guarantee the last one has saved .20 on every dollar he has ever earned, so I am 99% sure we don’t even have car notes. That’s not to say that I am ignorant of the fact that people carry CC debt and have car notes, but we often hang out with like minded people. The fact the poster did not think the number was that high is more of an indication to me of the type of people he associates with, not lack of interaction.

If you asked me, I would guess 40% of Americans carry a CC balance that is not paid off monthly. That’s purely a guess without looking it up. I would guess the older a person is the less likely they have CC debt, but the longer they have had CC debt the more likely they are to keep it as it is just habitual.

If you look at trend of US consumer debt since WW2 you would not be shocked.

What I find hard to understand (not necessarily hard to believe) is the mindset. While I feel for those who work hard to make ends meet, don’t live lavish lives, but need a little extra…, those who just look left and right and see what others have and take the mindset they should have similar lifestyles, although can’t afford it. The entitlement without regard for 25-30% compounded interest to the CC companies is unfathomable to me.

CC companies must be a factor in why personal finance is not a pillar in US education I suppose.

It blows my mind people get to the point of spending money they can’t pay off for a 20-25% interest rate. If you make that decision lightly, you deserve to be poor.

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I usually pay off before the statement hits but I will let zero percent charges go to term. It is easy to set it to automatically pay the 3, 6, 12 payments or whatever. It's not the end of the world if I am not at zero % utilization though, but I don't carry big balances month to month.

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While the 0% stuff is pretty nice, you also have to take it in stride and not get too caught up in it. With Buy Now, Pay Later becoming so popular and at 0% a lot of times, it can be easy to suddenly find yourself having dozens of things on biweekly or monthly payments even if it's just at 0%. The whole point of these things really is to eventually overwhelm you (or wait for you to have a windfall) with putting too much on bi-weekly/monthly payments and then you cant pay eventually and then the interest destroys you in the end.

I think 0% stuff can have a place with things, but it's not something I would lean on during more wealth building years like 30s/40s/50s. I remember when I got out of school I wanted a big 4k tv years ago. I had the money in my account to buy the $1000 tv I wanted, but then I got the "you can get 0% for 18 months on this store c.c."...and thought, well $55 a month sounds pretty good to keep my bank account as healthy as possible and I still only pay the $1000. Like 4 or 5 months in I just wanted to pay it off at that point, but then I found out you couldnt which I thought was weird, you had to make 18 months of $55 even payments...This is how they get you. Not all of them are setup like that, but a lot of them are.

I saw a tv at Brandsmart yesterday that advertised 48 months 0%, sure enough, you have to make 48 months of even payments and you cant pre-pay it. If you miss a payment or cant pay it off by the end of the term, you get killed in interest. Imagine paying off a tv over 48 months like a freaking car, even if it is 0%

Sure makes looking at $2k-$3k tvs very "Affordable", hey it's only $42/mo for this giant tv...but how silly would it be to paying off a tv for 4 years

How do interest rates work for debt you carry on CCs? Never have not paid down my balance down to zero.

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How do interest rates work for debt you carry on CCs? Never have not paid down my balance down to zero.

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Take the APR, divide by 12, multiply that by the balance you carry (as in, what you do not pay off by payment date)...that's your interest charge for the month.

Say you carry $6,000 of credit card debt after making your minimum payment. I think $6k is right around average right now for people who do have C.C. debt. If your interest rate is 20%, which from what I'm reading is also close to average...your monthly interest charge would be $100. So your balance the next month assuming no extra charges on the card would be $6,100.

That is $6,000 times .2 (interest rate) divided by 12 (months) to get the $100 of interest in the month.

For a lot of people they see $100 on $6000 as not a big deal because "its just $100 on a much larger amount. But that's $1200 over 12 months on $6000, pretty insane. Hope you enjoy all those clothes, tv, vacation you put on that card