Credit card debt by income..

[ironoutlaw]

I know a couple who were making around $70000 combined. Racked up credit card debt. Wife got a side gig (teacher) selling lesson plans online and has made over $100,000 the last several years from it, and will make over $150,000 this year. They are now wanting to get a consolidation loan because they struggle to make credit card payments. I'm just blown away someone making over $200,000 a year is struggling like they are.

[Hammmerhead]

Generally, many people suck with money. If you have to blame the lender, you're the problem.

[brnzbaklvr]

I can't believe this argument. People spend more than they can afford and like everything else these days, it's not their fault. I guess the banks held a gun to their head as they filled out the credit application.

If you read my OP I specifically said it fell on the individual but the banks also share blame.....Attention to detail. No one said that the individual didn't hold responsibility..

[188Musky]

Sort of right, sort of wrong. Banks extending credit to dumb asses is ONLY because they can get a bailout later.
Pass legislation making all the 'fixing' illegal. No one gets help - banks, borrowers, etc. It will stop dead cold.

Sort of right, sort of wrong.

Let’s not forget that Dodd-Frank forced banks to lend money to people that the banks knew could not pay it back.

ONLY?...Hardly.

[cart7]

Why are households earning a half a million a year carrying any sort of CC debt from month to month?

[Transom]

I'd have no issue with it if the US Congress made subsidies, bailouts, write offs, deductions and exemptions illegal.
Let the banks, brokerages, insurers burn in hell the next time our economy tanks. That's how it's SUPPOSED to work.
The ONLY reason they are bailed out ... it's funded by the working class, period. Congress isn't paying for them.

I am fine with that. Banks. Big three whatever. The government should not be in the business of picking winners and losers. If existing players go bankrupt and fail a new investor will be there to take the market share.

[Bub]

After working in consumer finance for 30+ years, I have to say I agree with Hammerhead 100%, most people "SUCK with money". The biggest problem I've seen is that our schools don't teach kids how to handle their personal finances. Sure there are parents that try in some cases to educate their children, but isn't that really just the blind leading the blind? Some of the people I've come across in my line of work have just astounded me with their financial ignorance, they don't have clue one how to handle money or credit. I've seen people that have never had a job, live off various types of welfare, and have credit card balances of $30k or higher, not to mention the people from other countries that come here on school Visa's and constantly rip off the banks. I've seen them get credit cards, pay their bill on-time the entire period of time they are in school and every 6 months ask for a small increase in their credit line while keeping the balance small. Then, as soon as they get their diploma and plan to move back to Thailand or China or Vietnam or Malaysia or.... they take a cash advance for the maximum amount on all of their cards, write a check to pay off the balance right away but then take a second cash advance for the maximum amount again before the check has a chance to bounce, then take their $60k or $80k in cash back to their home country. I've seen this exact scenario hundreds of times, it's just unbelievable how often it happens, yet WE pay for it in our high interest rates.

[bassboy1]

So the Emergency Economic Stabilization act in 2008 wasn't a bank bailout that cost billions based off from high risk lending practices??

It's a win win for the banks whether the debt is paid or not...

The operative word here is "willingly." Had the banks not lent mortgage money to high risk home buyers the Treasury Dept would have written them up and penalized them severely.

I am not saying that the borrowers aren't guilty of bad judgement in taking money that they can't pay back...of course they are. But, the banks and CC companies are not saints in this mess, either.

I replied based on credit cards, not mortgages. If you want to discuss mortgages, I guess it would be fair to point out that the banks were legally required to issue x% of subprime mortgages via the Community Reinvestment Act. That one wasn't 'willingly'.

[TOUCH OF CLASS]

They charge us the business owner a percentage plus fee every month heck they don’t made their millions even if the customer never pays the full more back.

[btlsranger]

Credit should be a tool of convenience for the person who otherwise can pay for, or has a viable means to pay for over a reasonable period of time. Credit should not be used as a short sighted means to push a problem off into the future. Intelligent people with financial experience are most likely to have done well for themselves and are most able to benefit from credit as a convenience. Less intelligent and/or less financially experienced people are more likely to find themselves in a financial hole, and are unfortunately the most likely to view credit as a quick resolution to the current financial problem without proper consideration for the future. Financial institutions are not doing these people any favors by extending them credit. They are profiting off someone's misery.

This, all day long. Well said.

[brushsjigs]

I know a couple who were making around $70000 combined. Racked up credit card debt. Wife got a side gig (teacher) selling lesson plans online and has made over $100,000 the last several years from it, and will make over $150,000 this year. They are now wanting to get a consolidation loan because they struggle to make credit card payments. I'm just blown away someone making over $200,000 a year is struggling like they are.

Docent matter how much money people make. Some just don't know how to budget with what they have. Look at all the lottery winners that have gone bankrupt in the first year.
WE Americans are pretty spoiled. The saving for and paying cash for something days are gone for most. Now it how much a month, only thing that matters to them, not what is the total cost of something.
It all comes down to personal responsibility, the bank is just a business trying to make money. They don't drive you to the stores and make you use the card.
America has become want it now

[Maddog10]

I shouldn't be surprised anymore, but I'm consistently astounded at how dumb people can be with their money. Does nobody keep a budget? It takes 10 minutes/month for me to import my monthly bank statement into my Excel spreadsheet and allocate each transaction into it's proper category. I know EXACTLY TO THE PENNY how much I spent the previous month in Bills, Investments, Necessities, Eating Out, Shopping/Fun, and then have a Miscellaneous category for things such as medical expenses or tax write-offs. Literally 10 minutes per month to do that.

I can't wrap my head why people spend money they don't have and expect it to work out well for them. It's something I'm passionate about. I've started hosting an after-school class at my old high school twice a year that talks to juniors and seniors about college, finances, student loans, credit cards, social media, etc, just so that hopefully they don't fall into the student loan or credit card trap that has currently crippled many of my friends from being able to buy their first house.

[411sponge]

Generally, many people suck with money.

Totally agree. About ten years ago, my friend at the time wanted to buy a new Mustang and wanted me to look at the contract before she decided to pull the trigger. I told her shes a fool for even considering those terms (the rate was close to 30%!!!! ) I told her shes going to end up paying close to 3-4 times what that car was worth in the end. Guess what was sitting in her driveway the very next day.

[TRCM]

No one pays attention to anything anymore as long as they have money........I've been astounded at how many (and the age of too) make fun of me because I know how much my paycheck is down to the penny.

I joked that I got a 1 cent raise this last paycheck, because my pay has been XXXXX.40 for the last 3 checks, and now it was XXXXX.41.

It does this every 3rd or 4th check.

But the fact that I said yes, I know how much my check is supposed to be down to the penny, they poked fun at me for being a penny pincher..........


Other things over the past year have shown me maybe 1 out of 20 people actually keep track of their money and where it goes.

If you don't know where it's going, how the heck do you balance your checkbook or bank account, or know for sure how much money you actually have ???

[TRCM]

Totally agree. About ten years ago, my friend at the time wanted to buy a new Mustang and wanted me to look at the contract before she decided to pull the trigger. I told her shes a fool for even considering those terms (the rate was close to 30%!!!! ) I told her shes going to end up paying close to 3-4 times what that car was worth in the end. Guess what was sitting in her driveway the very next day.

Had a friend do the same thing almost, he just didn't ask me to review the contract. Mentioned on a friday afternoon he was wanting to get a new mustang in a year or so when he was better off money wise.

Called me the next day and asked if I knew how to drive a stick, as he just bought a new mustang and it was a manual, which he didn't know how to drive. He had only had his current car 8 months, and he got it new too.

His payment and insurance were pushing a grand a month, for a 6 cylinder plain old mustang.

[rudapa]

So avg household was going up and then ticking down the past 2-years. Hmm good economy seems to have an influence.

[brnzbaklvr]

No one pays attention to anything anymore as long as they have money........I've been astounded at how many (and the age of too) make fun of me because I know how much my paycheck is down to the penny.

I joked that I got a 1 cent raise this last paycheck, because my pay has been XXXXX.40 for the last 3 checks, and now it was XXXXX.41.

It does this every 3rd or 4th check.

But the fact that I said yes, I know how much my check is supposed to be down to the penny, they poked fun at me for being a penny pincher..........


Other things over the past year have shown me maybe 1 out of 20 people actually keep track of their money and where it goes.

If you don't know where it's going, how the heck do you balance your checkbook or bank account, or know for sure how much money you actually have ???

I used to balance my checkbook now I run an Ap off from my phone....I check it a few times a day...What is nice about it is I get a running breakdown on where my money is being spent...I showed my wife how much she is spending on groceries and she about fell over ..You would also be surprised how much you spend eating out even if you only do it a couple of times a week....The Ap is a real eye opener..

[brnzbaklvr]

So avg household was going up and then ticking down the past 2-years. Hmm good economy seems to have an influence.

Its actually been trending down since 2009 if you look at the graph further down the page..I'm sure 2008 was a wake up call for some...but alot have short term memories..

[sdbrison]

Why are households earning a half a million a year carrying any sort of CC debt from month to month?

I am wondering if balances that people are paying off are being counted in these CC debt numbers. I, along with many here, use credit cards to pay for everything to receive a 1-3% cash back/reward. By using a no fee card and always paying the full amount due during the grace period there is 0% interest/cost, so you are in affect receiving a small discount on purchases. I have 2 cards and they always have a balance, but I would not consider that a "debt". Obviously big earners buy more than me so their balances would be higher which would affect the numbers if this report considers any balance at any time as "carrying debt".

[grandbassslayer]

I can't believe this argument. People spend more than they can afford and like everything else these days, it's not their fault. I guess the banks held a gun to their head as they filled out the credit application.

Exactly, nothing else here matters.