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© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.Americans have saddled themselves with credit card debt
By KEN SWEET NEW YORK©2025 GPlusMedia Inc.
39 Comments
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yakyak
Japanese are saddled with debt as well, just about 5 years behind.
Albert
Could you share the source of 5 years behind.
Meanwhile also Japan is still the country where cash is more commonly than credit cards l, secondly credit cards in Japan are more stricter.
dagon
Easy credit was the neo-lib trap to get Americans to accept the off shoring of the manufacturing base and those jobs where a HS education and 9 to 5 job could [by for a home in a few years and children's education.
Now tech workers with elite degrees live in their cars and precarious, non living wage work is the norm.
The financial industry and rentiers are enjoying it though.
https://www.opendemocracy.net/en/neoliberal-trap/
First15
Don't know what this idiot is talking about. I finished paying off my student loans back in 2019.
factchecker
Should be paying cash. It's legal tender.
MarkX
We always here about the resilient consumer in the US, they are always buying keeping the economy humming, but many of us have known for a long time it is all on credit and those chickens are coming home to roost. Yes Japan has a lot of national debt, but the individual consumer doesn't consume like their counterparts in the West. They don't have second homes, and many toys like RV's and boats etc.
TaiwanIsNotChina
The credit card companies aren't stupid. They will keep your limits low if they suspect you don't understand the bill paying part. I don't think it is likely to tank the economy.
First15
That's not how it works. Banks actually despise (And used to refuse, until the government made it illegal) giving out loans and credit cards to people who they know cannot pay them back. Reason being is that if people don't pay their loans, those banks make no money.
otherworldly
If you compare the 2 countries the American consumer is hands down 1000 percent more resilient. Have you been there lately? No risk no reward, America with all her challenges is far better off than anything I have experienced in Japan lately.
goldnugget
Cash provides all Americans with a low-cost, reliable, and private form of payment that consumers should always have access to. The challenge is the American Government doesn't like that form of payment and has brainwashed Americans into believing credit cards are better than cash, not the reverse.
astasher
"Americans have saddled themselves with credit card debt"
This is news?
WA4TKG
Not this one…biased reporting much ?
First15
Could also be referring to all those credit cards they're giving to illegals: https://archive.ph/EOGOD
GBR48
Retail therapy and credit cards are the road to hell.
The interest rates on them are so high, you really need to prioritise paying off any credit card debt as soon as you can. Then don't use them again. Only buy stuff when you can pay for it.
If you can, persuade your kids not to get one. Using them can be as addictive as drugs and alcohol.
If you are short of cash, reduce your spending. Have a clear out. Sell stuff you don't need or don't use. Get an extra part time job. Trade stuff online. Sell cookies door to door. Wash cars. Whatever it takes is better than using a credit card.
As a general rule, if you need to use a credit card, you shouldn't be using one.
Students loans switch education from a right to an investment. If you are not 100% determined on a specific career path with jobs that would be open to you could fill on graduating, even in a changing economy, don't make what would be a risky or bad investment. You don't need to go to uni from school. It's easier if you are young, but if you aren't sure what you want to do, get a job in an area that interests you, get paid, save up, skill up on the job, develop your CV and consider the best way of achieving your career aims. In many fields, employers will support you getting professional qualifications. Also consider lower cost online degrees, including ones offered by (recognised) global or foreign education providers. These can be part time courses.
You can study some subjects using coursework material in your own time to determine if it really interests you, before starting a course. Some stuff, doesn't necessarily require a degree. Computing skills can be self-taught up to employment. Your employer will then support any professional qualifications you require. And of course you can learn languages without doing a university degree. The internet has so much free/cheap content on it now, especially educational material, that you should make an effort to work out your best path forward, without getting into stacks of debt.
Redemption
Carpe diem. Learn from Trump who went bankrupt multiple times.
HopeSpringsEternal
High interest rates make buying home almost impossible for most without existing home equity (home to sell).
Since Biden took office 3 short years ago, average rent increased about 25%, food and energy even more, along with other living costs like insurance and healthcare.
Those with assets, like homes and stocks doing great, but young with student, credit card and auto loan debt and renting getting crushed. Recent poll, 13% feel better off financially under Biden, approx. 50% worse off.
Inflation slowed, but still historically high & accelerating last 6 months in truth, especially wages, up from 3% to 4.5%, making service more costly. Commodity prices and home prices also picking up, including rent.
High interest-rates makes everything more expensive to finance but DOES NOT COUNT as Inflation. When debt servicing costs increase, that's inflation for you!
SDCA
@GBR48
I love every bit you've mentioned. It is odd that in this world where you have so many career opportunities and choices available to you, you only get a few years to decide what you want to do, and that is before you are classified as an actual adult (I don't think 18 year old's are considered adults yet). Not to mention, you aren't exactly sure of what is actually available out there because schools don't teach you this, but you spend most of your time in school. Some careers require longer schooling so kids end up spending so much time and money until they are now past 25 years of age to begin work, not knowing what they are getting themselves into and what they have invested their youth into.
I definitely don't recommended anyone to go down the rabbit hole of taking out loans and using credit cards unless you are at least 90% committed to what you will use it for and 100% committed you will be able to pay it off. And the advice GBR48 is giving is spot on!
proxy
I am a bit older. When I graduated university and was thrown out into the cold dark world, interest rates were around 10% and the unemployment rate was around 8% in North America. It was pretty common for people to live with family for a couple of years, even rent a closet and many people who got married young lived with parents for years. People did what they had to do.
These are not particularly hard times in North America except for people who make bad choices by spending beyond their means and going into debt to buy more "junk."
HopeSpringsEternal
I agree with you in principle, but this much of this debt relates to massive increases in NECESSARY living costs, rent, food, energy, healthcare, insurance, etc.
For most renting, cost of daily life including all of above, easily +30% vs. just 3 years ago, prior to Biden and their debt payments are MUCH higher.
High prices are crushing people, especially young who often have student debt. Credit card becomes their last lifeline, the balance builds up etc.
wanderlust
They will keep your limits low if they suspect you don't understand the bill paying part.
If you don't use your card and spend, you don't receive a good credit rating, no matter how high your income or how expensive your property.
Stephen Chin
What's wrong qith being in debt?
As loooooooolong as you pay up before interest MOUNTS!
Jimizo
Genius.
Have you read a lot about this issue?
Mocheake
I had a friend visit me from the States last month and we got to talking about just this thing. When he told me he had just finished paying off his credit debt and it was over 35 grand, I nearly fell out of my chair! My measly couple of hundred thousand yen debt seemed trivial, inconsequential. At least he had paid it off though. Then I paid our drinking bill with Visa.
Redemption
Trump could have 100 million in debt and 20 million in equity and think he’s a millionaire.
Sven Asai
I guess they don't care anymore. Consumption as long as possible and credited and then running away from the debts mountain through the easy Fentanyl exit door.
TaiwanIsNotChina
Fentanyl deaths are 0.01% of the population. You don't have to be jealous of the US.
HopeSpringsEternal
Math issues above, as 1 million is approx. 0.30% of US population, +100K ANNUAL Fentanyl deaths = +0.03%, but anyone who claims +100K deaths somehow not a large avoidable ongoing tragedy is VERY misguided.
Drug & Human Trafficking Cartels LOVE Open Borders, NOT affected families above. Fentanyl causes lots of other societal damage besides death. High interest rates fuel drug use if you believe academic research.
Another Biden Failure = Fentanyl & High Interest Rates
Abe234
If only the cards were renamed from credit card to debt card the American consumer might actually see what it really is. Credit is what I have leftover in my bank account. Debt is spending something I don’t have. Using cash will allow you to engage your hands, eyes, and brain to see what your truest spend. Take those away and the psychological pain is removed which is exactly what the CC companies want. Drug addiction and credit addiction hit the same spot.
wallace
Fentanyl was a problem before Biden was in office. America's Drug War has been going on for decades and has cost more than $1 trillion.
https://www.whitehouse.gov/briefing-room/statements-releases/2023/11/16/fact-sheet-biden-harris-administration-continues-progress-on-fight-against-global-illicit-drug-trafficking/
ian
Re drugs, unfortunately it's not just illegal ones that are killing people
TaiwanIsNotChina
Yes, chatgpt issues aside, 0.01 and 0.03 are not that big of a difference estimate wise and the real number is less than 100k ANNUAL Fentanyl deaths as chatgpt likes to randomly capitalize.
Cephus
"The U.S. economy is currently performing better than most forecasters expected a year ago, thanks in large part to a resilient consumer," wrote Shernette McLoud, an economist with TD Economics, in a report. "However, more recently that spending is increasingly being financed by credit cards.”
You gotta love how these liberal journalist covers the failures of Joe's useless regime. Just visit any grocery store and when you come out I bet you won't to hear how the economy is doing great!. Just look at within 2-3 years how Joe's policies have turned every major road or highway underpass into a recruitive homelessness real estate
TaiwanIsNotChina
Consumer Confidence is at a 25 month high because you can't lie to people forever.
https://apnews.com/article/consumer-confidence-conference-board-spending-economy-ce87c4fed6f18ac92b0d915e7af7e828
HopeSpringsEternal
Important to realize it's NOT just Consumer credit cards suffering from high interest rates on their balances. Other credit-based debt like mortgages, auto and student loans also now MUCH more expensive!
PLUS, US GOVT. Treasury outstanding issuance growth approx. 10% in just LAST 6 months, $3T+ nearly size Japan's Entire Economy = US Govt. Credit Card Busy!!!
Ass
I'll never understand debt-havers
Cephus
Consumer Confidence is at a 25 month high because you can't lie to people forever.
Just because the parrots media says we don't have to believe it. It's evident the cost of groceries are over the roof and the most impacted group are poor families. Joe's total failure!
kaimycahl
@MarkX Japan is a country with a different culture not even fair to compare. Nor do Japanese have the incomes to have the second homes, and many toys like RV's and boats etc or a place to store them. The least pension or social security an American will get just from work at a MC Donald's and retiring will equal some if not most Japanese monthly salary. Its not how much you spend its all about how much you save. Don't spend more than you make live with in your means and swim in your own lane.
We always here about the resilient consumer in the US, they are always buying keeping the economy humming, but many of us have known for a long time it is all on credit and those chickens are coming home to roost. Yes Japan has a lot of national debt, but the individual consumer doesn't consume like their counterparts in the West. They don't have second homes, and many toys like RV's and boats etc.
kaimycahl
The primary reasoning behind issuing credit cards to consumers was to provide a convenient and flexible method of payment. Credit cards allowed consumers to make purchases without carrying large amounts of cash, and they could pay off their balances over time, offering financial flexibility. Additionally, credit cards provided financial institutions with a new revenue stream through interest charges and fees associated with credit card usage. What I don’t like about credit card companies is they will close or cancel your credit card if you don’t use the card which will make your credit rating (FICO score) to go down. These companies claim when a credit card is not used for an extended period, it becomes inactive and maintaining inactive accounts can cost them and they find them unprofitable due to administrative expenses and they also claim the potential risk of fraud. They also claim that a card not being used doesn’t provide them with data to evaluate a person’s creditworthiness, which they feel can make it difficult for them to assess the risk. They also claim they incur costs to maintain open accounts, by providing customer service, account statements, and periodic reviews and by closing inactive accounts it reduces their operational expenses. I don’t like credit cards but today to get a plane ticket for travel you need one or else it raises a red flag buying a ticket cash nowadays, how crazy is that? I only use them when purchasing or paying for a high-ticket item because if something goes wrong, I can have the company as another layer of protection to fight the dispute. Once I received the item and everything goes as expected I pay it in full to avoid the interest charges this allows me to keep the card active and not being dropped for inactivity, or if I go to a restaurant, I use the card paying for a meal and paying the balance in full to keep the account active and maintain a positive credit history.
First15
There are three kinds of people that typically take on debt. The first is people who are going through a rough patch in life and need some extra money to help them along (Usually this is solved by a savings account/"rainy day" fund, but things happen). The second is people who are using the loan as an investment in a business/house/etc. that they're using to get things off the ground in the hopes of making even more money in the future (It's advised you don't do this unless you already have a plan in place to pay it off anyone if things fall through, or enough money already where you don't necessarily need the loan).
The third is just people who have no money. I don't mean homeless nor people who lack of funds because of expenses. I mean people who are more than well enough off, but spend all their money buying crap for zero reason. It's the kind person people refer to when they say someone is "Keeping up with the Jones". Think of it like the college kid who's complaining about expensive books while talking on the latest iPhone and sipping their daily Starbucks coffee. Or the trailer park trash that complain about how expensive the payments are on their new boat, while playing the $120 edition of EA Sports FC on their $600 PS5 and $3000 8k TV.