Credit Card Debt Reaches Record Levels
By Jim Bauer
@porwest (85968)
United States
July 27, 2024 10:09am CST
It's not something that just happened yesterday. In fact, it has been a fact from even a year or so ago, that credit card debt has now reached levels into the trillions, which are record numbers.
Never before have Americans been so deeply in debt as they are now.
Yet, at the same time the Democrats are saying the economy is in the best shape it has ever been and is booming. That claim is being made despite median income being down, consumer confidence falling, and inflation which has slowed, but is still rising.
The tell here is not so much how deep in debt Americans are. The tell is for what.
According to statistics, the debt is being accrued not by discretionary spending. You know, things like an extra pair of shoes, eating out, taking a vacation or things like that. The debt that is being accrued is on non-discretionary things like groceries, gas for the car, and even common household bills.
The fact is that Americans are more cash-strapped than they have been in a very long time, and the worst part is, it will take at least a decade to return things to normal.
It is simply one other thing to think about as we go forward and make some very important decisions about the path we are on, and the one we might not want to take.
And it's not just credit cards being used here, folks. Record numbers of withdrawals from people's retirement accounts is happening at the same time.
Are we better off than we were four years ago? The resounding answer is NO! So, what makes anyone believe that, enduring the same discourse and the same ideas will lead us to being better off four years from now?
12 people like this
9 responses
@marguicha (220291)
• Chile
27 Jul
In my country, young people are more into debt than the older ones. We were told to care for our things and not overspend. I still have furniture and gadgets that were my parents. My daughters though have a tendency to throw and change, something that we did not teach them. And the still younger generation learns by destroying.
3 people like this
@marguicha (220291)
• Chile
28 Jul
@porwest For a long time I only blamed many problems in the difference of wages between the rich and the poor. But lately I have also seen that what I used to call poor people spend more than what I spend, but they spend it in other things. In a "poor" person´s house, they have better and more TVs, cellphones and tablets than what I have in my house. And "poor" teens make long lines to buy the best sneakers the first day they are sold. Those people also spend a lot of money buying fast food instead of learning how to cook inaxpensive yet better food. I am sure that it is a big educational problem.
1 person likes this
@porwest (85968)
• United States
29 Jul
@marguicha I have long said, poverty is not an income problem. It is a spending problem and a lack of knowledge problem. I still continue to stand firmly by that.
1 person likes this
@porwest (85968)
• United States
28 Jul
I will say that overspending is nothing new overall. People simply do it. They spend more than what they earn and pay little attention to saving and investing, and it hurts them. But the difference is that now these debts are not happening so much by choice as they are happening almost by necessity.
Granted, I would argue that inflation can more easily be navigated through when you have a good amount of money already saved before it happens, and one has a good handle on how to manage money. But of course, that's also not the case for most people.
For me, the point of this is to understand fundamentally how we got here and for people to make some hard decisions about how we get away from this circumstance.
2 people like this
@porwest (85968)
• United States
28 Jul
You definitely made the right choice. I still believe having a credit card for emergencies can be helpful. Not to incur debt when an emergency happens, of course. But to have ready and immediate access to large amounts of money on the spot.
Say, for example, you are on a road trip and suddenly the transmission goes out. It's nice knowing I can pay the $3,000 bill right away rather than have to wait out the transfer time moving money from savings to somewhere the bill can be paid from.
Just my two cents.
1 person likes this
@porwest (85968)
• United States
28 Jul
Whenever the media reports on inflation, people tend to focus on TODAY'S number. Many people do not account for the cumulative inflation that has already occurred. What they don't realize is that if inflation over the last three years has risen cumulatively 21%, which it has, that when they say inflation is now 2.5%, that means you are paying 23.5% more today than you were 3 years ago.
1 person likes this
@moffittjc (120997)
• Gainesville, Florida
27 Jul
At work, my Delivery Coordinator has to verify the product purchases before she schedules and delivers merchandise to the customers (we certainly wouldn't want to deliver products that haven't been paid for!). Anyway, she asked me just yesterday if there was something majorly wrong going on in our economy, because she has never seen so many orders cancelled because customers' credit cards declined. It used to be that maybe she would see 1 or 2 a month, now she's seeing 3-4 per day. It's sad that we've come to this point.
2 people like this
@moffittjc (120997)
• Gainesville, Florida
27 Jul
@kareng Inflation has outpaced consumer incomes, so eventually there had to be a tipping point. I think we may be at that tipping point now. People just can't afford anything anymore. Even basic necessities are out of reach of so many people.
2 people like this
@LindaOHio (171927)
• United States
28 Jul
As you know, we always pay our balance when it comes due. We use our credit card for just about everything to accumulate reward points. Have a great day.
1 person likes this
@porwest (85968)
• United States
28 Jul
@2ndchances24 The key here in her comment though is that she pays the bill each month in full, thereby not incurring any interest charges, but still receiving the rewards. Some people don't do it this way, of course, and certainly the ones who don't pay out far more in interest than they ever will receive in rewards.
1 person likes this
@2ndchances24 (7646)
• Cloverdale, Indiana
28 Jul
That's why people are so broke now cause the credit points
that people think are saving them $ when really all it's doing
is putting people in MORE debt than they can afford.
2 people like this
@RevivedWarrior (1239)
• India
28 Jul
You have spot on with the challenges with US economy ! There has not been any attempt at debt restructuring or ensuring the economy gets better than the previous years. The median income has declined and job market has not been great as well. Many economists are predicting another economic slowdown in 2025. Situation worldwide also not great as well. And in the best case, the economy would need atleast 5 years to get better from the current situation . I too have my debt and I am working on same to clear off . Hope things could turn better from here. Thanks for sharing the insights!
@crossbones27 (49077)
• Mojave, California
1 Aug
I agree Democrats not telling the truth either and trying to get elected, but what are Republicans proposing?I see the country more focused on saving democracy from Republicans and problems they created but sure some greedy Democrats too. Its why Trump hit at the worse time. the economy is screaming something is wrong but people are rigging it.
Instead of running its natural course and let it crash and we will rebound, these fools must be doing all sorts of shady things. Car payments are now higher than rent payments used to be, then add insurance and rent prices. 2200 in poor parts of California. Can you imagine starting off like we always teach. You 18, you a man now, go make 27,000 dollars a year just to afford rent, not to eat or cloth yourself, not to explore and do big things. Just go find your own place and good luck making rent. They wonder why no one is having kids anymore.
@LeaPea2417 (37339)
• Toccoa, Georgia
1 Aug
I have minimal credit card debt. But it is still debt even if it is small compared to some.
1 person likes this
@2ndchances24 (7646)
• Cloverdale, Indiana
28 Jul
I am SO GLAD that we don't have that problem we Bal what we spend
we know just how much we get to how much we spend & we don't just
spend to be spending we thought a head of all this & it saved us A LOT.
We started our food pantry yrs ago & thank go d we did we have the
supplies we need like plenty of TP, PT, laundry soap, dish soap, bleach
trash bags, throw away plates, food, water, you name it we have it.
Our $ we get we pay our bills 6 mons in advance, water & trash & phone
so that's a BIG help, but right now with the EXTRA $ being spent on the
work we're doing in the CABIN we wasn't expecting BUT at the same time
B-4 I crashed I have saved like 10,000$ & THAT'S what's saved us to do
what we are doing in the cabin & what credit cards we have we don't
use them like most people do & spend spend spend, we put so much on it
where we KNOW how long it's going to take to get it paid off & that's IT.
So yeah inflation & all this other Bull crap going on isn't helping ANY 1
rather they think it is or not is their crazy way of thinking, & it's NOT
going to get ANY BETTER if they (WE) don't do something to CHANGE IT
& 1 is STOP & THINK about where things were when trump was in office
to WHERE we are cause of WHO is in office NOW, it's NOT THAT HARD.
