Economy Who's to blame for Americans being massively in debt and poor?

[F1980]

From my own experience the top two things that contribute to people being broke is them buying brand new cars on credit and eating out almost every day. They don't cook at home, and what's even worse now is that they don't even drive out to pick up the food. They use UberEats or another type of delivery service where they upcharge you on the food, charge you delivery fee AND tip on top of all that.

When I was a kid in the 80s, if we dont finish our cereal, my grandma would put the bowl in the fridge to finish later.

A lot of people blame the top 1% and the politicians.

I blame the people themselves. Most people I know drive brand new or newer cars. Their cars have a little problem and their solution is to go out and buy a brand new car instead of getting it fixed.

They use their credit cards to buy things they cannot afford. They use them to pay their bills, to go on vacations they cannot afford.

 

[Bobby00]

Im just happy no bank gave me a credit card in my 20s i was a massive idiot. Now early 30s never had a credit card and learned to be frugal.

 

[PG29 red0 Jr]

Im just happy no bank gave me a credit card in my 20s i was a massive idiot. Now early 30s never had a credit card and learned to be frugal.

I am happy my friend talked me into getting my first credit car when I was like 19 years old. I don't use that card, but it's my oldest line of credit. I have always had my card(s) on autopay, so I never pay any interest. Credit cards are awesome!

 

[Source]

Im just happy no bank gave me a credit card in my 20s i was a massive idiot. Now early 30s never had a credit card and learned to be frugal.

You’re missing out on free money. You do have to be disciplined to pay off your card every month though.

 

[Bobby00]

I am happy my friend talked me into getting my first credit car when I was like 19 years old. I don't use that card, but it's my oldest line of credit. I have always had my card(s) on autopay, so I never pay any interest. Credit cards are awesome!

Good if it works for you but if i cant afford something i save up. I see no reason to borrow money when i can just save up. Though i heard in US its different where you need credit to buy a house right?

 

[koquerelle]

I am happy my friend talked me into getting my first credit car when I was like 19 years old. I don't use that card, but it's my oldest line of credit. I have always had my card(s) on autopay, so I never pay any interest. Credit cards are awesome!

They can be. I doubt you're the norm though.

 

[Bobby00]

You’re missing out on free money. You do have to be disciplined to pay off your card every month though.

Free money? I know nothing about that though im debt free meaning i dont owe anyone a thing which is the way i want to keep it but sounds interesting you get free money for borrowing money?

 

[Source]

Free money? I know nothing about that though im debt free meaning i dont owe anyone a thing which is the way i want to keep it but sounds interesting you get free money for borrowing money?

if you get a card that offers cash rewards you gain points for every purchase. If you then pay of your card entirely every month there is no interest charge. Depending on the card the points you gain can be used like cash.

 

[syct23]

Good if it works for you but if i cant afford something i save up. I see no reason to borrow money when i can just save up. Though i heard in US it’s different where you need credit to buy a house right?

You basically need credit for anything now days in murica..

Yes, you can just save up your money to make a large purchase. That could take months or even years, whereas if you have the credit and a good down payment you can go home with pretty much whatever you want at that moment.

Credit cards are a great cheat code to get things faster, but as others have said before.

With No Discipline in a payment plan, that is one of the major reasons for Americans ending up poor or in debt.

 

[F1980]

Free money? I know nothing about that though im debt free meaning i dont owe anyone a thing which is the way i want to keep it but sounds interesting you get free money for borrowing money?

Some credit cards give you 2% cash back. Make sure to pick the credit card with no annual or any hidden fees. Use the credit card to buy essentials and make sure you have it set to pay off the COMPLETE balance at the end of every month. You'll never pay interest, while you're getting 2% of every dollar you spend. Make sure you only use it to buy essentials.

Also, some credit cards give you a cash sign-in bonus. I'll give you an example. I signed up for a Wells Fargo active cash card that has a $300 sign up bonus. I got the card, used it to pay some medical bills, which are part of "essentials," then I received the $300. My medical bill was $500 and I only ended up paying $200 because of the sign up bonus.

I did the same with Capital One. They offered me a $200 sign up bonus and I already have that money. I did the same with Bank of America, etc...

You can use credit cards to your advantage.

 

[KnightTemplar]

From my own experience the top two things that contribute to people being broke is them buying brand new cars on credit and eating out almost every day. They don't cook at home, and what's even worse now is that they don't even drive out to pick up the food. They use UberEats or another type of delivery service where they upcharge you on the food, charge you delivery fee AND tip on top of all that.

When I was a kid in the 80s, if we dont finish our cereal, my grandma would put the bowl in the fridge to finish later.

A lot of people blame the top 1% and the politicians.

I blame the people themselves. Most people I know drive brand new or newer cars. Their cars have a little problem and their solution is to go out and buy a brand new car instead of getting it fixed.

They use their credit cards to buy things they cannot afford. They use them to pay their bills, to go on vacations they cannot afford.

It's your fault. Because you touch yourself at night.

 

[Bobby00]

if you get a card that offers cash rewards you gain points for every purchase. If you then pay of your card entirely every month there is no way interest charge. Depending on the card the points you gain can be used like cash.

Interesting. So how many points for 1 dollar is it like 1 to 1 or how does that work? What happens if something sudden happens like you needing surgery or someone dies and you need to pay for funeral etc. is the interest high due to these points if you dont pay it off immediately? I rather leave that money on the table as its way easier to just live off what you have instead of paying groceries you ate 20 days ago but i still find it interesting how that works though im not really considering it tbh.

 

[PG29 red0 Jr]

Maybe some of you don't understand..........

Debit card = evil

Credit card = wonderful

Spend the way you would with a debit card, but use a credit card.

When you use a credit card, that is not your money so if there is fraud or theft, you are protected. With a debit card you are not.
If you use the credit card instead of a debit card, you are establishing credit history and you will improve your credit score.
If you use your credit card the way you use a debit card, you will earn points, and cash back, etc. on your purchases.

Debit card = bad, Credit card = good.

 

[Bobby00]

You basically need credit for anything now days in murica..

Yes, you can just save up your money to make a large purchase. That could take months or even years, whereas if you have the credit and a good down payment you can go home with pretty much whatever you want at that moment.

Credit cards are a great cheat code to get things faster, but as others have said before.

With No Discipline in a payment plan, that is one of the major reasons for Americans ending up poor or in debt.

But if i want something i can just use my savings. I put 500 to the side each month and if i need something i could get it though its more for emergency's. I feel like while some use the card to their advantage it bankrupts a fair amount of people too. It makes it sound like a great deal but how then are so many people in the US in debt? Wrong credit card? Irresponsible behavior by the consumer or what else?

 

[Source]

Interesting. So how many points for 1 dollar is it like 1 to 1 or how does that work? What happens if something sudden happens like you needing surgery or someone dies and you need to pay for funeral etc. is the interest high due to these points if you dont pay it off immediately? I rather leave that money on the table as its way easier to just live off what you have instead of paying groceries you ate 20 days ago but i still find it interesting how that works though im not really considering it tbh.

It’s entirely dependent on the card. But most give back like 2% on gas and restaurants and 1% back on all other purchases. Amazon gives 5% on all Amazon purchases. Costco has some similar program as well. Not only are you earning money on purchases but you are also earning money on the interest of your cash being in the bank longer. Over the course of a year you can build up a lot of points. It really is free money if you do it correctly.


There are a ton of added benefits depending on the card. There are purchase protection. Some offer occasional discounts. There are also some that offer travel and rental car coverage if you use your card to pay.

 

[Scheme]

Personal debt is actually a sign of how prosperous a nation is. Look at the correlation between personal debt and quality of life and you'll notice the countries at the top are all personal debt heavy countries.

https://www.imf.org/external/datamapper/HH_LS@GDD/CAN/GBR/USA/DEU/ITA/FRA/JPN/VNM

At the top:

Switzerland128.3
Australia111.75
Korea, Republic of105.09
Canada102.39
Hong Kong SAR95.75
Netherlands94.85
New Zealand94.45
Sweden88.23
Thailand86.9
Denmark86.22
United Kingdom83.17
Norway77
United States74.44
Japan68.16
Luxembourg67.19
Malaysia66.88
France66.15
Finland65.83
Portugal61.48
China, People's Republic of61.46
Belgium60.37

At the bottom (of countries where this metric is even tracked/applicable):

El Salvador28.31
Costa Rica27.48
Morocco27.43
Poland26.68
Ireland26
Samoa25.11
Russian Federation21.12
United Arab Emirates20.11
Hungary19.8
Peru16.7
Mexico16.57
Indonesia16.24
Lesotho14.41
Nicaragua14
Kazakhstan13.65
Saudi Arabia12.8
Albania12.53
Romania12.14
Türkiye, Republic of10.9
Bangladesh6.87
Ukraine4.52
Argentina4.07
Pakistan2.77
Sierra Leone1.95

Now I am not saying that you should go deep into debt to be prosperous, but credit availability is an important part to the stabilization of a nation. Being able to purchase houses and cars and have a credit system where you are able to amortize that across decades is a sign of stability.

 

[HARRISON_3]

I blame Jussie Smollett.

 

[method115]

Interesting. So how many points for 1 dollar is it like 1 to 1 or how does that work? What happens if something sudden happens like you needing surgery or someone dies and you need to pay for funeral etc. is the interest high due to these points if you dont pay it off immediately? I rather leave that money on the table as its way easier to just live off what you have instead of paying groceries you ate 20 days ago but i still find it interesting how that works though im not really considering it tbh.

Yea I used to think like you because I got screwed over by a CC when I was 18. I signed up for a bank account and BOA was like oh look you are eligible for a $3000 limit and I went crazy and never paid it off.

Once I started making enough money I realized I was just leaving money on the table by not getting cash back on my purchases. I'm easily pulling in like $2000 a year with my cash back.

 

[Bobby00]

It’s entirely dependent on the card. But most give back like 2% on gas and restaurants and 1% back on all other purchases. Amazon gives 5% on all Amazon purchases. Costco has some similar program as well. Not only are you earning money on purchases but you are also earning money on the interest of your cash being in the bank longer. Over the course of a year you can build up a lot of points. It really is free money if you do it correctly.


There are a ton of added benefits depending on the card. There are purchase protection. Some offer occasional discounts. There are also some that offer travel and rental car coverage if you use your card to pay.

But lets say you are unable to pay due to a emergency like i mentioned how far would that set you back? Obviously banks dont just gift money out of goodness and they need to recoup that money somehow. Lets say you lose your job and dont qualify for unemployment how much in the hole would that bring you if you got no savings?

 

[syct23]

But if i want something i can just use my savings. I put 500 to the side each month and if i need something i could get it though its more for emergency's. I feel like while some use the card to their advantage it bankrupts a fair amount of people too. It makes it sound like a great deal but how then are so many people in the US in debt? Wrong credit card? Irresponsible behavior by the consumer or what else?

You’re not using your savings correctly if you are constantly dipping into it. Kinda defeats the meaning of the name as well.

But, everyone spends differently and everyone has different needs for purchases.

Like life, with credit cards it is up to the person to figure out what balance works for them.