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Credit Card Problem Coming Back?

Discussion in 'Politics' started by Jason76, Dec 16, 2016.

  1. Jason76 Cat Moderator

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  2. jimbob Cat Moderator

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    Everybody wants it now. Don't got the money? Use your credit card. Yes, private debt is over twice the amount of public debt. Many trillions of dollars.
     
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  3. Quality Checked Bird Moderator

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    The article says that " The result is that the average American household debt in 2015 was $90,000. (Source: Ibid.)" That is somewhat misleading.

    According to Slate (quoting somebody's figures)

    "5. The average household that has credit card debt owes $16,000. The number is $27,000 for auto loans, $48,000 for student loans, and $169,000 for mortgages." Average household? I don't believe it. 260,000 is too large a figure. A very large share of the American population (about 35%) does not own the house they live in. They rent. Another portion of the population, about 29%, own their homes outright -- no debt. So, 35% of the population has a very large debt.

    $16,000 for credit card debt might be accurate, as might $27,000 for auto loans.

    $48,000 for student loans? I think it is closer to $30,000.

    But large numbers of people didn't go to college at all, so have no student debt, or they graduated a long time ago and long since paid that off. One has to assume that some people owe a lot more than $30,000.

    There is a difference among types of debt.

    Credit card debt often was accumulated in the purchase of goods that are consumed fairly quickly -- like food, gas, medical services, and so on. There usually isn't much to show for a lot o credit card debt. On the other hand, cars, houses, and degrees are very useful things to own, and often make it possible to earn enough to pay off one's debt. Most people don't expect to pay off their home loans quicker than 15 to 30 years.

    But all that aside, people owe too much debt, the national government owes too much debt, and corporations owe too much debt. We aren't going to get back to zero debt -- most countries have never been at zero debt -- and it isn't a good idea, anyway. It's better to have some debt to finance good projects that increase over-all wealth, then only pay cash, and build very little.

    The solution for a lot of people is to switch from credit cards to cash only. The US government is practically not in a position to cut much debt, because a lot of the debt (like interest on previous borrowing) has to be paid.
     
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  4. KenBrace Bird Administrator

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    $90k is way too much. I don't know anyone that has anywhere near that level of credit card debt. There is no way that the average household has that much debt.

    Yeah that sounds much more accurate.
     
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  5. jimbob Cat Moderator

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  6. KenBrace Bird Administrator

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    According to that, US citizens have an average of $55,645 in personal debt. My guess is that the majority of that is housing related.
     
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  7. jimbob Cat Moderator

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    Yes, I'm sure much of it is housing related. But it wasn't too many years ago that we were made aware how fragile even that market is.
     
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