# Credit Card Debt is Rising



## Son_of_Perdition (Apr 25, 2015)

In 2011, 4 years after the economic slowdown started it was reported that the average credit card debt was $9,500.  Today 4 years later it is rising.



> In a national survey, 42.4 percent of Americans reported having credit card debt, and the average balance is a staggering $10,902. According to a survey  by the National Foundation for Consumer Counseling, 37 percent of  Americans would be more embarrassed to admit the balance on their credit  cards than their age or weight. - Nick Clements (Daily Finance)



The scary thing about these figures is that a higher percentage of people are taking charge and paying off their cards monthly, carrying no balance, earning those elusive rewards.  How is it possible to go up.  Obviously more people are using the credit not necessarily buying more stuff they are using the cards to survive and feed their families.  Auto loans are sky rocketing and mortgages are opening up for higher risk borrowers, and I personally think we are not paying attention to recent history.   I carry cash and debit cards, no debt, my newest auto is a 2005.  Home paid off and as result my FICO score suffers because of the afore mentioned facts.  No inquires (good), no instalment debt (bad) and low number of older accounts listed (bad).  Some financial pundits are saying that when people are stashing money into cd's, money markets and savings accounts, it hurts the economy.  To me this is a bizzaro world we are living in.


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## SeaBreeze (Apr 25, 2015)

I pay off my credit cards in full, I figure if I couldn't do that, then I couldn't afford to make the purchase.  I pay for most things with checks or cash if necessary on a daily basis.


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## Son_of_Perdition (Apr 25, 2015)

SeaBreeze said:


> I pay off my credit cards in full, I figure if I couldn't do that, then I couldn't afford to make the purchase.  I pay for most things with checks or cash if necessary on a daily basis.



Kudos to you, I can't say that I pay them off since I have none I don't need the temptation & can live without the rewards.  I'm referring to the multitude of seniors who are in retirement or near retirement who have accumulated high interest, unsecured 'loans' from their credit cards.  Coupling the unsecured debt and major health issues is the number one reason for bankruptcy filings for seniors.



> Pensions used to be a standard benefit in many jobs, but this is no  longer the case. Fewer and fewer companies are offering pensions. Those  workers that do get pensions often find that the pension combined with  Social Security is still not enough to cover basic living expenses.
> 
> Senior citizens who are on a fixed income may use credit cards to pay  their basic living expenses. When they can't pay those credit cards,  bankruptcy may be the only choice. In fact, a University of Michigan Law  School study indicated that as many as two out of three seniors filing  for bankruptcy cite credit card debt as one of the primary reasons. - excerpt from an article by NOLO


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## Don M. (Apr 25, 2015)

Credit cards are a trap that can quickly put a person in a risky financial situation.  If they buy a bunch on their cards, then make the minimum monthly payments, they might as well be going to some PayDay Loan charlatan, as the interest they will be paying eventually runs the cost of the item up to double, or more, of the original price.  There is nothing wrong with using credit cards as a convenience, so long as a person pays the full balance when the bill comes.  Concern about their Credit Score is just another way the big banks rope people into using their credit cards and financing purchases so as to boost their score....while putting even more money into the pockets of the bankers.  

What amazes me is the low net worth of so many retirees.  It's as if millions of seniors failed to recognize that they would be getting older, and need  to save/plan for their retirements.  Most of many Seniors net worth is in their home equity, and when the housing market takes a hit, they lose Big Time.  

http://money.usnews.com/money/retirement/articles/2012/07/23/retiree-net-worth-declines


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## Son_of_Perdition (Apr 25, 2015)

Speaking of payday lenders, one of my co-workers was looking into ways to supplement her income.  She send for a self-study guide that included all the references, guides and forms she needed to establish a check cashing/payday lending outlet.  She got excited along with other co-workers when they realized what a cash cow they were.  She pointed out the methods and how the traps work.  High interest, taking advantage of the down and out.  It was like watching vultures circling carrion.  She finally tabled the idea because her moral compass kicked in, she told me she couldn't bring herself to exploit other people's misery.


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## Don M. (Apr 25, 2015)

I cannot understand how these PayDay Loan operations can continue to exist.  I thought laws against Usury and Loan Sharking were passed long ago...but apparently those laws no longer apply, or are being ignored.  Credit card interest rates already cost consumers billions of dollars every year, and the banks make a fortune off them.  Then, merchants who take these credit cards add at least 3% to the price of their merchandise...which also goes right back to the banks for the "privilege" of accepting payment with these cards.  Around here, we still have some small businesses that offer a 3% discount to those who pay by cash or bank check.


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## Ameriscot (Apr 25, 2015)

We make all purchases using credit cards in order to earn air miles and pay them off in full each month.  We never pay interest.


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## Son_of_Perdition (Apr 25, 2015)

Once again

1.    I don't fly!
2.    Most of our travel is spur of the moment with no itinerary via motor home.  
3.    Even if I was getting 1.5% back as with a Cap1 card, I would only make $180 yearly ($12,000 estimated expenses & purchases X 1.5% = $180).  
4.    I can't use a card to pay my space rent, auto tags, all utilities would only reward - $3,600 X 1.5% = $54 yearly.
5.    We gift Xmas & birthdays to children, grand children in cash only.  Right size & color.
6.    I spend less than $50 on gas a month.  Rewards - $600 X 1.5% = $9.
7.    I ask for a cash/senior/AARP discount everywhere.
8.    I don't believe the hype about the benefits of reward cash or points.  Banks are not your friend.
9.    I don't have to spend X amount of dollars in a certain time to get the bonuses.
10.    There is not a chance of a late fee or interest in the event of a mixup, health issue or absent mindness.

Total yearly rewards possible $180 + $54 + $9 = $243.  ($320 if I use a Citi card 1 and 1)

Taking into account any impulse purchases I would be in the hole, also at $20-25 a month it's not worth my time.  
I budget everything and only spend what I have in my wallet.  I don't even take my debit cards, strictly cash.
I use the 48 hour rule when shopping for a larger item, most times I talk myself out of it.


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## applecruncher (Apr 25, 2015)

I thought there had been a crackdown on payday loan places within the relatively recent past. Maybe I need to do some research.

I always thought they were a ripoff. I don’t think most of us are looking down our noses at people in dire financial situations – I know _I’m_ not. Sure, it’s nice to boast about paying off credit card balances every month and to tell people about all the thousands of dollars you (general) have in the bank. But not everyone is that fortunate. Times are hard for a lot of people. I realize that some people earn low wages, don’t have decent credit and they can’t get credit cards or loans thru regular channels.

But I think there are basically two types of people who go to these payday loan places:

1) The person who can’t get a credit card (or their credit card is maxed out), they have no savings, they can’t get a bank loan, it’s another week or so before they get paid, family won’t/can’t help. They have no food, the rent is past due and/or the electric/gas is about to be shut off. Cars break down. Emergency dental and no dental insurance. Stuff happens. So they get a payday loan as a last resort.

2) The person who overextends on a regular basis, spends money on frivolous things to make themselves feel better or to impress others and is often broke. They want instant gratification (manicures, hairstylists, Starbucks every day, a new item of clothing, liquor/food for a party, etc.) and they’ll worry about it tomorrow. When payday comes they’ll get another payday loan.

The fees are outrageous, and it’s a vicious cycle. I even know of banks who offered cash advances thru checking accounts, but they stopped a few years ago.

I’m also seeing commercials for car title loans, although I don’t know how that works. 

Son_of_Perdition – like you I ask for senior/AARP discount whenever I can get it. Even get 10% discount at Subway and my favorite pizza place. No shame in that.


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## ronaldj (Apr 25, 2015)

we have a couple pay them off every month and have done so for 15 plus years ....average 25 dollars in rewards each month....


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## Butterfly (Apr 25, 2015)

I have a couple of credit cards, one I pay off every month, and one very low interest one I use for what I term "disasters," like when plumbing pipes burst under my house (pipes just wore out and sprouted leaks, 70+ year old pipes) early this spring.   I pay way more than the minimum and will have it paid off in no time.


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