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

[RoastBeast]

This is false and if anything could drop your credit score depending on how you define “debt.” I have no idea why this misinformation is still being spread around. You don’t need to open more cards to maintain or increase your credit score unless your combined credit limit is too low compared to the amount you utilize (you typically don’t want to exceed 30% utilization), and you want to increase your overall limit to help reduce utilization (ideally <10%). Also as long as you pay your credit cards on time (all the time) your credit should not take a hit because if any statement balance is not paid in full your credit score could significantly reduce.

I feel like this info had to have come from credit card companies in the pre internet era where they attempted to trick people into getting into debt with them in order to build credit.

Kinda like DeBeers saying you need to spend 3 months worth of income on a diamond for your wife.

 

[boingyman]

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.

First of all you are looking at it wrong. You would have spent that money anyways regardless if it was with a credit card vs a debit card/cash. It’s just instead of paying for any good/services in real time you are basically taking a very short term loan within the timeframe of the statement balance being due. The great part is if you pay it off on time it’s free. So as long as you are responsible enough to pay it off on time each month there should not be a problem. If an emergency occurs and you need to rely on this money to pay for it then you are screwed either way because you will either not have the money to do so or would have to sacrifice paying interest on credit card debt. This is part of the reason why an adequate emergency fund is crucial in the event of an emergency. This is basic personal finance 101.

In terms of playing the credit card game what he mentioned is the very basic of the basic. Paying with a credit card to get cash/points back in addition to cash back sites such as Rakuten, making use of coupons, sales, deals, discounts, etc is just basic frugal ways to get the most from what you’re spending. There are much more lucrative ways to truly make getting multiple credit cards worth it, however it’s not for everyone and if I’m being honest it’s definitely a privilege to be able to play the game where can get tens of thousands of dollars of free travel, status and all the other perks involved.

 

[My Spot]

Lack of personal responsibility.

 

[William Munny]

lack of personal responsibility, accountability,

but I would also include the racket that is College tuition.

you shouldn't go to school, only to become in debt 6 figures, and then work a job 3 quarters of your life to pay off this debt.

 

[boingyman]

Yea, sounds like the other poster is equating a line of credit with debt.

Having a $20k credit limit doesn't mean you have to use it lol

This is part of the reason why so many people are bad with money. The lack of financially literacy is huge. I would put it up there with health literacy. It is what it is though. We live in a consumer driven society that feeds capitalism.

 

[My Spot]

lack of personal responsibility, accountability,

but I would also include the racket that is College tuition.

you shouldn't go to school, only to become in debt 6 figures, and then work a job 3 quarters of your life to pay off this debt.

If you're a senior in HS and still don't know how loans and interest rates work then you probably shouldn't be going to college right out of HS in the first place.

 

[William Munny]

If you're a senior in HS and still don't know how loans and interest rates work then you probably shouldn't be going to college right out of HS in the first place.

I agree. I also believe these basic courses about loans and interest rates should be taught in HS

 

[freakroor]

every case is different. Placing the blame on any specific thing is laughable.

 

[D 1 Wrestler]

This is false and if anything could drop your credit score depending on how you define “debt.” I have no idea why this misinformation is still being spread around. You don’t need to open more cards to maintain or increase your credit score unless your combined credit limit is too low compared to the amount you utilize (you typically don’t want to exceed 30% utilization), and you want to increase your overall limit to help reduce utilization (ideally <10%). Also as long as you pay your credit cards on time (all the time) your credit should not take a hit because if any statement balance is not paid in full your credit score could significantly reduce.

Be in debt meaning using the cards and paying them. Someone with no credit cards who pays cash or uses debit cards will have a shit credit score in the US. Forcing people to have more overall limit then gives the chance to spend more than you have hence people being in debt

 

[boingyman]

Be in debt meaning using the cards and paying them. Someone with no credit cards who pays cash or uses debit cards will have a shit credit score in the US. Forcing people to have more overall limit then gives the chance to spend more than you have hence people being in debt

You said in your original post that consumers are forced to get MORE credit cards. Not true. You can have 1 and just keep the utilization low by using it maybe once a month on gas or groceries. That is your choice. Use your debit card for other transactions. You won't get dinged in your credit score for that.

Also no one is forcing anyone to have a high credit limit and the responsibility on how you use and pay off your credit card is on the consumer. My combined credit limit is probably more than 300k. Doesn't mean jack shit to me. It's just because I have a shit load of credit cards (all paid off on time via auto pay) from getting all the sign up bonuses and other perks. My family of 4 is going to Japan in 2 months. Flights paid 100% with points. Half the hotels are paid with points. Only reason why I'm paying some with cash is due to low cash rate on some of the rooms we booked. Even after all that between my wife and I we still have $15-20k worth of points we can use.

 

[MLarson]

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.

What would be some good cards to look into for that?

 

[NickNick]

What would be some good cards to look into for that?

There are sites that compare all the credit cards and their rewards programs, NerdWallet is the one I have used in the past. Like people said on here, credit cards should be treated like debit cards. Credit cards are amazing as long as you don't accrue interest. If I know I have a large purchase upcoming I typically take a look at credit card offers to see if there are any good introductory offers. A lot of times you'll find a card that gives you $200-$400 cash back after you spend X amount in the first 2-3 months (usually like $1k-$2k) along with interest free for 12-18 months. Now I am not doing this all the time, usually only once every few years.

People that carry balances on credit cards have always been sort of crazy to me. Like I get if you get put in a situation where you have no choice, like using your job or something, but it's a slippery slope.

 

[MLarson]

There are sites that compare all the credit cards and their rewards programs, NerdWallet is the one I have used in the past. Like people said on here, credit cards should be treated like debit cards. Credit cards are amazing as long as you don't accrue interest. If I know I have a large purchase upcoming I typically take a look at credit card offers to see if there are any good introductory offers. A lot of times you'll find a card that gives you $200-$400 cash back after you spend X amount in the first 2-3 months (usually like $1k-$2k) along with interest free for 12-18 months. Now I am not doing this all the time, usually only once every few years.

People that carry balances on credit cards have always been sort of crazy to me. Like I get if you get put in a situation where you have no choice, like using your job or something, but it's a slippery slope.

I've seen Nerd Wallet's site before but on banks the up to 4.60% on savings accounts but not how much you have to put in and save every month.

 

[fedoriswar37]

The system lol Fuck , your country would likely be better off if 95% of DC were laid off and replaced .

 

[jk7707]

 

[NickNick]

I've seen Nerd Wallet's site before but on banks the up to 4.60% on savings accounts but not how much you have to put in and save every month.

You would need to check out credit cards, this is the category I am usually looking at:

Best Cash Back Credit Cards of April 2024 - NerdWallet

Cash back is the most flexible credit card reward, since you can use it for anything. Our list will help you find the perfect card for the way you spend.

www.nerdwallet.com

I use a few different ones to maximize cash back. For example I have one that gives more for groceries, another that gives more for eating out, etc. One example of a good one is the Amazon Prime card from Chase. It's pretty much a no brainer if you have Amazon Prime and use it a good amount. You get 5% back on all Amazon purchases along with some other Amazon owned places like Whole Foods.

 

[deviake]

Capitalism. Keeping up with the Jones's. Gotta have nice things. You're not enough without X_product. They're doing exactly what society and advertising is programming them to do.

 

[James Eagle]

theres a few families to blame

the five banking ones

predatory lending and then the misuse of direct deposit, they run all of peoples charges, then accept the deposit, so people get $35 overdraft charges on every purchase, and the cycle continues

 

[tastaylvr]

Finance influencers are among the scummiest people on Earth in addition to being completely wrong on most issues.

 

[tastaylvr]

This is part of the reason why so many people are bad with money. The lack of financially literacy is huge. I would put it up there with health literacy. It is what it is though. We live in a consumer driven society that feeds capitalism.

Humans don't have free will and most of the decisions they make are impacted by their environment. There is a reason why America has a blue zone in their country which just outright bans fast food/unhealth foods. It is extremely easy to program a society to spend/eat. It doesn't really have much to do with being knowledgeable. We have the most health knowledge in human history yet we are the unhealthiest. It has zero correlation. There is a reason why companies spend billions on advertisement. It's because it works and locks into human psychology.