"Americans spend $19 billion dollars using credit cards in one month"
Fixed it for you. A whole lot of us use credit cards exclusively. And we pay it off each month.
Could be. The article tries to paint a picture where that isn't quite the case:
"Wells Fargo reported on Fed data showing several regions experiencing a tightening in credit availability and an uptick in delinquency rates, pointing to a growing financial burden on households."
"Specifically, the New York Fed noted an increase in financial pressure among families with high debt burdens. Similarly, the Philadelphia Fed observed a widening gap where low-income households are reducing their spending but incurring more debt, contrasting with high-income households that continue to spend freely."
It's not a complete picture so I guess people are free to fill in the gaps as they please, but I don't see anything definitive here.
Well and the month they’re talking about happens to be November. Gee, I wonder why so many Americans were making purchases in November.
Sure, but the graph in the article shows a continuing increase. November is when it crossed the $5 trillion mark, and it was surely boosted due to holiday shopping, but the trend is ever-increasing.
I'm close to a thousand £ back in rewards over the few years I've been using it. It costs me £2 every month and i get a minimum of £20 back per month. But if I can pay for my car insurance or something truly big? Oh boy do my cash back go through the roof!
Could i live on debit alone? Sure. But then i wouldn't get hundreds back every year for simply using my card.
Plus guaranteed insurance on purchases. Doesn't show up and paid by cc. Reverse it. Paid by debit card, tough luck.
For a while, i wondered why Americans tend use their credit cards instead of debit cards but then it occurred that they are encouraged to use credit cards because you cant get into debt using debit cards and debt is very profitable.
There's that, but there are also more legal consumer protections against fraud with credit cards than with debit cards.
Also debit cards don't earn cash back or points. I visit my cousins on airline points. Monitor your cards and make sure you don't exceed your budget, same as a debit card.
They do if you use a credit union. I bank through two, and both offer cash back equivalent to any credit card, multiple overdrafts without fees, higher intrest rates on both checking and savings, access to better loan intrest rates, and I'm keeping my money in my community.
I love my credit union, and while my debit card does get points my credit card gets more points
This is not a thing at any credit union around me.
6% on groceries adds up.
You also have to have credit to get loans. I ran into this issue when I bought a house. I hadn't had a credit card in years because it was too easy to get into debt. The only thing that saved me is I am on one of my folks credit cards for rare emergencies if I'm watching their house and something goes awry (like the dehumidifier shits all over the basement floor and needs replaced).
I would totally use my debit card more if it has the same level of fraud protection that credit cards have.
It'd be nice to be able to do a chargeback on a debit card transaction.
Do you understand why there are so many incentives to use credit cards? Your reply and those under you are listing why credit cards are the better choice, however I wonder if they all know they are being played.
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
Those that use their credit card and pay it off in full are using them responsibly, the way they should be used.
FTFY, the rest of your comment is just wrong.
Right. So the extra features are paid for by swipe fees. So why don't debit cards have the same set of features? Because banks want you to use the type of card that has the most return potential. Not wrong, just a difference of opinion.
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
That’s both factually wrong, other users already explained it to you, and patently ridiculous. How exactly is someone who uses a card and then pays the bill in full every month subsidized? I don’t think you understand the word subsidized.
So why don't debit cards have the same set of features? Because banks want you to use the type of card that has the most return potential.
This is also wrong.
The Durbin Amendment capped interchange rates on debit cards and debit card rewards programs began disappearing because of it.
You make multiple factually incorrect statements. Whether it’s better to use a credit or debit card is a matter of opinion, your other statements are just wrong.
How exactly is someone who uses a card and then pays the bill in full every month subsidized?
Receiving a service for free means it is subsidized.
The Durbin Amendment capped interchange rates [snip]
I'm sorry, you have mistaken me for an American.
You make multiple factually incorrect statements.
You have yet to convince me that.
It is obvious that banks have the ability to make more off their users bad choices when using credit cards than they do debit cards. It is also obvious that it is in the banks best interest to push credit cards more than debit cards. Just because you and I are capable of managing our funds well, isn't the case accross all. I worked for a UK bank for 4 years (2004-2008), however the opinion I am portraying here doesn't need any inside knowledge, its just common sense.
Receiving a service for free means it is subsidized.
It’s not free. It costs an interchange fee, just like a debit card. That’s not paid by users of the card. At most it’s “subsidized” by the business, or maybe everyone if those interchange fees are built into the product price, in which case the card user is indirectly paying for it.
I'm sorry, you have mistaken me for an American
Almost like banking regulation isn’t universal, making your claims ambiguous rather than outright wrong. Especially without any supporting evidence to your claims.
You have yet to convince me that.
Ok, whether you’re convinced doesn’t change the fact your statements are wrong.
It is obvious that banks have the ability to make more off their users bad choices when using credit cards than they do debit cards.
Prove it. Many banks (in the US) charge exorbitant overdraft fees that make them billions and f dollars a year.
Just because you and I are capable of managing our funds well, isn't the case accross all.
Explain how one persons inability to manage their finances is the responsibility of someone who manages theirs responsibly? Banks engage in plenty of dubious, and sometimes outright illegal, activities. Blaming them because an individual doesn’t have the common sense to spend more on a credit card than they have is patently ridiculous.
I worked for a UK bank for 4 years (2004-2008), however the opinion I am portraying here doesn't need any inside knowledge, its just common sense.
Opinion. Your opinion isn’t in question. The statements you make to support it, without any evidence, are. You seem to think that when you have an opinion any claim you make around that can just be supported by how you feel.
You know what’s just common sense? Understanding that if you have X amount of money, spending X+1 on a credit card is a poor choice because you can’t pay it. That’s personal responsibility and trying to pass that responsibility on to people who are “being played” by not doing that is blame-shifting.
I see it glaringly obvious that banks make more money from credit cards than debit cards and therefore offer incentives to use them.
In fact in /any/ business, if one product is being pushed with incentives, its because that product has the best ROI. Its just economics, and the consumer should be aware of that. Nothing is free in this world, and most large companies are predatory.
Yes, it is my opinion, I didn't state that I have hard evidence. I didn't interview a bank CEO.
I get the feeling you think this is a personal attack on you and others like-minded, not at all. I'm sorry you don't see things the same as I do and that is fine, I don't mind. I like to try and learn from these exchanges, maybe not from this one.. yet.
So far I've understood:
Banks receive an "interchange" fee per transaction
The interchange fee was reduced considerably in US law
Banks incentivise the crap out of credit cards
Banks receive a marginally increased interchange fee (~0.1%)
That last two points, can you help me understand why banks incentivise credit cards when interchange fees for cards are so similar? Or is that 0.1% the big deal?
Banks receive a marginally increased interchange fee (~0.1%)
interchange fees for cards are so similar? Or is that 0.1% the big deal?
Back this up because they are not similar. Credit cards charge higher interchange fees and the more people you have using your card, the more you're making in fees. Seems like an incentive to try and get someone to use your credit card instead of a debit.
Banks incentivise the crap out of credit cards
Every for profit company tries to incentivize their product. I know there are grocery stores in the UK. When they run a sale, promotion, or discount like I've seen posted online for items close to expiration they are incentivizing the purchase of that product.
You made a claim that people who use cards responsibly and take advantage of rewards programs are being "played". How? You also seem to blame-shift the choices of those who spend beyond their means to those who don't. A person chooses to apply for a card, a person chooses to use that card, a person chooses to spend more than they can afford. That choice is on the individual making it, not some other person who doesn't make bad choices.
Debit and credit cards have their benefits and drawbacks but either is a viable choice when used responsibly and a bad choice when used irresponsibly. The thing you're upset with is poor banking regulation, not responsible card owners. The fact that a bank can charge multiple $10, $20, $30 dollar overdraft fees on a debit OR usurious interest rates is an example of a private entity not being kept in check and being allowed to exploit people.
Wow Americans really get shafted if those are the rates. VISA and Mastercard in Europe is 0.2% for Debit and 0.3% for Credit for consumer transactions.
Every for profit company tries to incentivize their product. I know there are grocery stores in the UK. When they run a sale, promotion, or discount like I’ve seen posted online for items close to expiration they are incentivizing the purchase of that product.
Yeah, they could be incentivicing the product that gives them the most return.
You made a claim that people who use cards responsibly and take advantage of rewards programs are being “played”. How? You also seem to blame-shift the choices of those who spend beyond their means to those who don’t. A person chooses to apply for a card, a person chooses to use that card, a person chooses to spend more than they can afford. That choice is on the individual making it, not some other person who doesn’t make bad choices.
Whoa, I think you've misnterprited the spirit of my original comment. Do you take offense to the term "played"? There is no blaming, or shunning of choices, its just economics. The guys selling the product /want/ people to be irresponsible with their finances. They are like "yea, spend more than you have, I don't mind, more where that came from"
Debit and credit cards have their benefits and drawbacks but either is a viable choice when used responsibly and a bad choice when used irresponsibly. The thing you’re upset with is poor banking regulation, not responsible card owners. The fact that a bank can charge multiple $10, $20, $30 dollar overdraft fees on a debit OR usurious interest rates is an example of a private entity not being kept in check and being allowed to exploit people.
I'm not upset with anyone. I think the problem here is the differences between the US and Europe banking systems. In Europe, overdraft fees are capped and the interchange rates are fractional in comparison. But credit cards are still what banks incentivise, and makes me question their motives. I don't trust banks or any large company for that matter to put my own best interests first. I have seen friends and family get into credit card debt over the years. Sure its their bad life choices that cause their own problems. No blaming between different types of people. However no-one denies that banks spread gold glitter on credit cards in an effort to bring in more punters. Debit cards, not so much.
I did learn something today. US banking seems more hostile to consumers than Europe conterparts. Is it because of regulation? I have read in the past that US politics are reluctant to add more regulation to services like banking, relying on "free market" and the lark.
You comment on a news article about Americans and credit cards and argue your opinion which has nothing to do with Americans or their credit cards.
In context your supporting statements for your opinion are factually wrong. You also have yet to explain your original comment.
Your reply and those under you are listing why credit cards are the better choice, however I wonder if they all know they are being played.
The slang term played usually means that you have been outwitted or used as a pawn.
How are they being played?
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
How are they being subsidized?
I’ll be flabbergasted if you can answer either of those questions in any way that makes sense in the context of Americans and their credit cards.
I hope you learned something because I’m pretty sure your spurious statements have made me dumber.
You’re getting played if you don’t use one. All those rewards are not from the people racking up credit card debt, it’s from swipe fees.
If you don’t use a credit card you pay the same price as the ones paying with a card, except the ones with a card get rewards. The ones without pay extra since stores charge extra to cover the fee
They even lobbied successfully to prevent merchants from passing this on to credit card customers. Which means they pass it on to all customers instead.
The fees are currently capped at 2.5% but that’s just for the swiped. There are other fees as well that end up costing the merchant more.
If you’re responsible with them you get a number of perks. Many cards have some mix of the following:
extended warranties on electronics
fraud protection (I had a credit card stolen and $17k charged to it, all forgiven)
pretty easy dispute system if someone fucks you (Iceland Air fucked me real bad on a canceled flight/voucher bs scam they were pulling on people during Covid. I filed a dispute and got all my money back)
% back on all kinds of purchase categories
free road side assistance
air miles
upgrades in flights
iirc some hotels and rental car companies require them
etc etc
I’ve never paid interest on a single card in my life because I always pay my balance in full. Works out great for me. If you’re bad with money, I’d stay way.
This!
There are a lot of consumer protections on credit cards that do not apply to debit cards. I pay for basically everything with a credit card. I pay the card off every month.
I don't think people realise that, you are actually paying for all those things, just in a roundabout way. Even people without credit cards are
Sure, but that's just how it goes. Businesses take their transaction fees and roll that up into their overhead expenses and then factor out their retail pricing with that in mind.
Knowing that, you can try to claw some of that back by utilizing card benefits or not. It's basically the only thing you do have control of in this situation.
Eh, the more you claw back, the more they jack up their overheads.
Never wonder why credit cards never became that popular in other countries, or why lots of places abroad have signs saying "American Express not accepted"?
You're getting robbed, and walking right into it.
Debit cards have the same consumer protection as credit cards in Europe, the only "benefits" you're getting are the ones you've paid for
Credit card transaction fee percentages have remained about the same for quite a while, so the overhead for businesses running cards has not really changed. And interest rates for carrying a balance change all the time, but I have never once in my life paid said interest because I pay my balance off every month. That's the only responsible way to use credit cards.
In any case, credit cards aren't going anywhere for the time being. So if you're in the US or some other country where they're prevalent, you can participate or not. That's your choice. But you're paying for it anyway, as you yourself pointed out.
Lol the percentages remained the same cos all the prices went up 😂
Guess why a part of that increase happened
Uh, sure. Ok.
We also can't get cashback rewards with the vast majority of debit cards. It adds up.
because you cant get into debt using debit cards
Lol that's cute. They've recently started changing this shit, but at least when I was in college, banks were 100% putting people into debt and making tons of money on overdraft fees. For using debit.
They had a program called, "overdraft protection" that customer service loved to sign you up for if you accidentally overdrafted. That should fix things right?
Lol no. Turns out what they meant by "protection" was "protection from your card being declined." In other words, if a purchase was going to put your account into the negative, instead of simply declining the transaction and preventing the customer from incurring a fee, it makes sure the purchase goes through, and the customer is charged $35 for overdrafting.
They also had a practice of re-ordering a customer's transactions in order to maximize overdraft fees. I believe this one has been illegal since Obama though.
It’s also because a lot of people see the rewards as ways of getting free money. However that’s really only the case if you pay your card regularly. As well some Americans truly don’t have the required income to live. So they go into debt. It’s terrible, sad, and wrong on so many levels, but it’s a major part as well.
Frankly I use my credit card as my debit card. Hell I don't even have a physical debit card. Why you ask? Rewards points.
Fair... but what I was alluding to is a banking crash that will make the "great recession" seem like a fart in the wind.
Think the LA riots, but in every major city, military being mobilised, civil war, the next violent revolution, what have you - because that debt hole will make a crater out of society.
And no, you don't want violent revolution. Why? Germans didn't become Nazis overnight. The economic collapse after WW1 put Germans in the position of being forced to bring wheelbarrows of cash to the store for a single loaf of bread. This made German people so desperate and angry that... well, you know the rest.
Why do you sound excited? This would literally ruin the entire century and maybe the next one.
...I did? I'm sorry, that was not the intention. Could you please point out which phrases and sentences that raised concerns?
Or was it the first post? The "oooOoOoo" part? Maybe I was a bit hamfisted, but I was trying to allude to historic cases of massive bank defaulting. Perhaps I was a bit brash.
You're fine, it did come off a bit like some accelerationist fanfic I've heard
This is definitely an order of magnitude calculation, but doesn't that correspond to $60 per person in the US? Is this big number scary article?
Depends. Are you dividing by total population or actual cc holders? Because the latte isn't as big.
That's an espresso way to debt central that's for sure
Mocha money mocha problems amirite
Stats from some googling. Assuming there are 250 million adults in US, and 80% have credit cards, that gives me 200 million holders, or ~$100 per person. That's not really a whole lot of money anymore. Not in a world where taco bell costs $20.
Ya I just checked and you're right. However, we could still infer certain trends.by examining the shift
Agreed. The article also includes a consumer debt trend over time. It seems to outpace inflation by about 33% which is more noteworthy to me.
BUT THE ECONOMY IS BOOMING!!
Hooch, hookers and coke or wage theft?
This could be another indicator that we are going into recession. I did not read the article (because who does that? 🤣) but when you look at rising credit card debt combined with the mass layoffs, it usually means folks are on their last legs, financially speaking.
That is assuming there actually is a problem with higher credit card debt and the topic is ‘t being sensationalized, of course.
Another indicator to watch out for is falling revenue in earnings reports. Falling revenue, particularly in retail and consumer goods spaces means recession is inbound.
I firmly believe that, absent some additional support, we will enter a recession within 2 years.
Note: I don’t claim to be an economist, but I am old and I have lived through a few of these downturns.
"Americans spend $19 billion dollars using credit cards in one month"
Fixed it for you. A whole lot of us use credit cards exclusively. And we pay it off each month.
Could be. The article tries to paint a picture where that isn't quite the case:
"Wells Fargo reported on Fed data showing several regions experiencing a tightening in credit availability and an uptick in delinquency rates, pointing to a growing financial burden on households."
"Specifically, the New York Fed noted an increase in financial pressure among families with high debt burdens. Similarly, the Philadelphia Fed observed a widening gap where low-income households are reducing their spending but incurring more debt, contrasting with high-income households that continue to spend freely."
It's not a complete picture so I guess people are free to fill in the gaps as they please, but I don't see anything definitive here.
Well and the month they’re talking about happens to be November. Gee, I wonder why so many Americans were making purchases in November.
Sure, but the graph in the article shows a continuing increase. November is when it crossed the $5 trillion mark, and it was surely boosted due to holiday shopping, but the trend is ever-increasing.
I'm close to a thousand £ back in rewards over the few years I've been using it. It costs me £2 every month and i get a minimum of £20 back per month. But if I can pay for my car insurance or something truly big? Oh boy do my cash back go through the roof!
Could i live on debit alone? Sure. But then i wouldn't get hundreds back every year for simply using my card.
Plus guaranteed insurance on purchases. Doesn't show up and paid by cc. Reverse it. Paid by debit card, tough luck.
For a while, i wondered why Americans tend use their credit cards instead of debit cards but then it occurred that they are encouraged to use credit cards because you cant get into debt using debit cards and debt is very profitable.
There's that, but there are also more legal consumer protections against fraud with credit cards than with debit cards.
Also debit cards don't earn cash back or points. I visit my cousins on airline points. Monitor your cards and make sure you don't exceed your budget, same as a debit card.
They do if you use a credit union. I bank through two, and both offer cash back equivalent to any credit card, multiple overdrafts without fees, higher intrest rates on both checking and savings, access to better loan intrest rates, and I'm keeping my money in my community.
I love my credit union, and while my debit card does get points my credit card gets more points
This is not a thing at any credit union around me.
6% on groceries adds up.
You also have to have credit to get loans. I ran into this issue when I bought a house. I hadn't had a credit card in years because it was too easy to get into debt. The only thing that saved me is I am on one of my folks credit cards for rare emergencies if I'm watching their house and something goes awry (like the dehumidifier shits all over the basement floor and needs replaced).
I would totally use my debit card more if it has the same level of fraud protection that credit cards have.
It'd be nice to be able to do a chargeback on a debit card transaction.
Do you understand why there are so many incentives to use credit cards? Your reply and those under you are listing why credit cards are the better choice, however I wonder if they all know they are being played.
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
Those that use their credit card and pay it off in full are using them responsibly, the way they should be used.
FTFY, the rest of your comment is just wrong.
Right. So the extra features are paid for by swipe fees. So why don't debit cards have the same set of features? Because banks want you to use the type of card that has the most return potential. Not wrong, just a difference of opinion.
That’s both factually wrong, other users already explained it to you, and patently ridiculous. How exactly is someone who uses a card and then pays the bill in full every month subsidized? I don’t think you understand the word subsidized.
This is also wrong.
The Durbin Amendment capped interchange rates on debit cards and debit card rewards programs began disappearing because of it.
You make multiple factually incorrect statements. Whether it’s better to use a credit or debit card is a matter of opinion, your other statements are just wrong.
Receiving a service for free means it is subsidized.
I'm sorry, you have mistaken me for an American.
You have yet to convince me that.
It is obvious that banks have the ability to make more off their users bad choices when using credit cards than they do debit cards. It is also obvious that it is in the banks best interest to push credit cards more than debit cards. Just because you and I are capable of managing our funds well, isn't the case accross all. I worked for a UK bank for 4 years (2004-2008), however the opinion I am portraying here doesn't need any inside knowledge, its just common sense.
It’s not free. It costs an interchange fee, just like a debit card. That’s not paid by users of the card. At most it’s “subsidized” by the business, or maybe everyone if those interchange fees are built into the product price, in which case the card user is indirectly paying for it.
Almost like banking regulation isn’t universal, making your claims ambiguous rather than outright wrong. Especially without any supporting evidence to your claims.
Ok, whether you’re convinced doesn’t change the fact your statements are wrong.
Prove it. Many banks (in the US) charge exorbitant overdraft fees that make them billions and f dollars a year.
Explain how one persons inability to manage their finances is the responsibility of someone who manages theirs responsibly? Banks engage in plenty of dubious, and sometimes outright illegal, activities. Blaming them because an individual doesn’t have the common sense to spend more on a credit card than they have is patently ridiculous.
Opinion. Your opinion isn’t in question. The statements you make to support it, without any evidence, are. You seem to think that when you have an opinion any claim you make around that can just be supported by how you feel.
You know what’s just common sense? Understanding that if you have X amount of money, spending X+1 on a credit card is a poor choice because you can’t pay it. That’s personal responsibility and trying to pass that responsibility on to people who are “being played” by not doing that is blame-shifting.
I see it glaringly obvious that banks make more money from credit cards than debit cards and therefore offer incentives to use them.
In fact in /any/ business, if one product is being pushed with incentives, its because that product has the best ROI. Its just economics, and the consumer should be aware of that. Nothing is free in this world, and most large companies are predatory.
Yes, it is my opinion, I didn't state that I have hard evidence. I didn't interview a bank CEO.
I get the feeling you think this is a personal attack on you and others like-minded, not at all. I'm sorry you don't see things the same as I do and that is fine, I don't mind. I like to try and learn from these exchanges, maybe not from this one.. yet.
So far I've understood:
Banks receive an "interchange" fee per transaction
The interchange fee was reduced considerably in US law
Banks incentivise the crap out of credit cards
Banks receive a marginally increased interchange fee (~0.1%)
That last two points, can you help me understand why banks incentivise credit cards when interchange fees for cards are so similar? Or is that 0.1% the big deal?
Back this up because they are not similar. Credit cards charge higher interchange fees and the more people you have using your card, the more you're making in fees. Seems like an incentive to try and get someone to use your credit card instead of a debit.
Every for profit company tries to incentivize their product. I know there are grocery stores in the UK. When they run a sale, promotion, or discount like I've seen posted online for items close to expiration they are incentivizing the purchase of that product.
You made a claim that people who use cards responsibly and take advantage of rewards programs are being "played". How? You also seem to blame-shift the choices of those who spend beyond their means to those who don't. A person chooses to apply for a card, a person chooses to use that card, a person chooses to spend more than they can afford. That choice is on the individual making it, not some other person who doesn't make bad choices.
Debit and credit cards have their benefits and drawbacks but either is a viable choice when used responsibly and a bad choice when used irresponsibly. The thing you're upset with is poor banking regulation, not responsible card owners. The fact that a bank can charge multiple $10, $20, $30 dollar overdraft fees on a debit OR usurious interest rates is an example of a private entity not being kept in check and being allowed to exploit people.
Wow Americans really get shafted if those are the rates. VISA and Mastercard in Europe is 0.2% for Debit and 0.3% for Credit for consumer transactions.
Yeah, they could be incentivicing the product that gives them the most return.
Whoa, I think you've misnterprited the spirit of my original comment. Do you take offense to the term "played"? There is no blaming, or shunning of choices, its just economics. The guys selling the product /want/ people to be irresponsible with their finances. They are like "yea, spend more than you have, I don't mind, more where that came from"
I'm not upset with anyone. I think the problem here is the differences between the US and Europe banking systems. In Europe, overdraft fees are capped and the interchange rates are fractional in comparison. But credit cards are still what banks incentivise, and makes me question their motives. I don't trust banks or any large company for that matter to put my own best interests first. I have seen friends and family get into credit card debt over the years. Sure its their bad life choices that cause their own problems. No blaming between different types of people. However no-one denies that banks spread gold glitter on credit cards in an effort to bring in more punters. Debit cards, not so much.
I did learn something today. US banking seems more hostile to consumers than Europe conterparts. Is it because of regulation? I have read in the past that US politics are reluctant to add more regulation to services like banking, relying on "free market" and the lark.
You comment on a news article about Americans and credit cards and argue your opinion which has nothing to do with Americans or their credit cards.
In context your supporting statements for your opinion are factually wrong. You also have yet to explain your original comment.
The slang term played usually means that you have been outwitted or used as a pawn.
How are they being played?
How are they being subsidized?
I’ll be flabbergasted if you can answer either of those questions in any way that makes sense in the context of Americans and their credit cards.
I hope you learned something because I’m pretty sure your spurious statements have made me dumber.
You’re getting played if you don’t use one. All those rewards are not from the people racking up credit card debt, it’s from swipe fees.
If you don’t use a credit card you pay the same price as the ones paying with a card, except the ones with a card get rewards. The ones without pay extra since stores charge extra to cover the fee
They even lobbied successfully to prevent merchants from passing this on to credit card customers. Which means they pass it on to all customers instead.
The fees are currently capped at 2.5% but that’s just for the swiped. There are other fees as well that end up costing the merchant more.
I'm gonna wait and see if you can figure out how your statement relates to credit cards being more profitable for the ruling class than debit cards...
If you’re responsible with them you get a number of perks. Many cards have some mix of the following:
I’ve never paid interest on a single card in my life because I always pay my balance in full. Works out great for me. If you’re bad with money, I’d stay way.
This!
There are a lot of consumer protections on credit cards that do not apply to debit cards. I pay for basically everything with a credit card. I pay the card off every month.
I don't think people realise that, you are actually paying for all those things, just in a roundabout way. Even people without credit cards are
Sure, but that's just how it goes. Businesses take their transaction fees and roll that up into their overhead expenses and then factor out their retail pricing with that in mind.
Knowing that, you can try to claw some of that back by utilizing card benefits or not. It's basically the only thing you do have control of in this situation.
Eh, the more you claw back, the more they jack up their overheads.
Never wonder why credit cards never became that popular in other countries, or why lots of places abroad have signs saying "American Express not accepted"?
You're getting robbed, and walking right into it.
Debit cards have the same consumer protection as credit cards in Europe, the only "benefits" you're getting are the ones you've paid for
Credit card transaction fee percentages have remained about the same for quite a while, so the overhead for businesses running cards has not really changed. And interest rates for carrying a balance change all the time, but I have never once in my life paid said interest because I pay my balance off every month. That's the only responsible way to use credit cards.
In any case, credit cards aren't going anywhere for the time being. So if you're in the US or some other country where they're prevalent, you can participate or not. That's your choice. But you're paying for it anyway, as you yourself pointed out.
Lol the percentages remained the same cos all the prices went up 😂
Guess why a part of that increase happened
Uh, sure. Ok.
We also can't get cashback rewards with the vast majority of debit cards. It adds up.
Lol that's cute. They've recently started changing this shit, but at least when I was in college, banks were 100% putting people into debt and making tons of money on overdraft fees. For using debit.
They had a program called, "overdraft protection" that customer service loved to sign you up for if you accidentally overdrafted. That should fix things right?
Lol no. Turns out what they meant by "protection" was "protection from your card being declined." In other words, if a purchase was going to put your account into the negative, instead of simply declining the transaction and preventing the customer from incurring a fee, it makes sure the purchase goes through, and the customer is charged $35 for overdrafting.
They also had a practice of re-ordering a customer's transactions in order to maximize overdraft fees. I believe this one has been illegal since Obama though.
It’s also because a lot of people see the rewards as ways of getting free money. However that’s really only the case if you pay your card regularly. As well some Americans truly don’t have the required income to live. So they go into debt. It’s terrible, sad, and wrong on so many levels, but it’s a major part as well.
Frankly I use my credit card as my debit card. Hell I don't even have a physical debit card. Why you ask? Rewards points.
All to the benefit of the oligarchs of this nation, which will get bailed out if they don't anyway.
oooOoOoo - getting dangerously close, aren't we? What happens when say people take out more credit than US banks can actually honour?
This... Americans Are Tapped Out
https://youtu.be/ghhCAPPZk7Q
Fair... but what I was alluding to is a banking crash that will make the "great recession" seem like a fart in the wind.
Think the LA riots, but in every major city, military being mobilised, civil war, the next violent revolution, what have you - because that debt hole will make a crater out of society.
And no, you don't want violent revolution. Why? Germans didn't become Nazis overnight. The economic collapse after WW1 put Germans in the position of being forced to bring wheelbarrows of cash to the store for a single loaf of bread. This made German people so desperate and angry that... well, you know the rest.
Why do you sound excited? This would literally ruin the entire century and maybe the next one.
...I did? I'm sorry, that was not the intention. Could you please point out which phrases and sentences that raised concerns?
Or was it the first post? The "oooOoOoo" part? Maybe I was a bit hamfisted, but I was trying to allude to historic cases of massive bank defaulting. Perhaps I was a bit brash.
You're fine, it did come off a bit like some accelerationist fanfic I've heard
This is definitely an order of magnitude calculation, but doesn't that correspond to $60 per person in the US? Is this big number scary article?
Depends. Are you dividing by total population or actual cc holders? Because the latte isn't as big.
That's an espresso way to debt central that's for sure
Mocha money mocha problems amirite
Stats from some googling. Assuming there are 250 million adults in US, and 80% have credit cards, that gives me 200 million holders, or ~$100 per person. That's not really a whole lot of money anymore. Not in a world where taco bell costs $20.
Ya I just checked and you're right. However, we could still infer certain trends.by examining the shift
Agreed. The article also includes a consumer debt trend over time. It seems to outpace inflation by about 33% which is more noteworthy to me.
BUT THE ECONOMY IS BOOMING!!
Hooch, hookers and coke or wage theft?
This could be another indicator that we are going into recession. I did not read the article (because who does that? 🤣) but when you look at rising credit card debt combined with the mass layoffs, it usually means folks are on their last legs, financially speaking.
That is assuming there actually is a problem with higher credit card debt and the topic is ‘t being sensationalized, of course.
Another indicator to watch out for is falling revenue in earnings reports. Falling revenue, particularly in retail and consumer goods spaces means recession is inbound.
I firmly believe that, absent some additional support, we will enter a recession within 2 years.
Note: I don’t claim to be an economist, but I am old and I have lived through a few of these downturns.