Credit card balances spiked in the third quarter to a $1.08 trillion record. Here's how we got here
Credit card balances spiked in the third quarter to a $1.08 trillion record. Here's how we got here
Strong consumer spending boosted credit card balances to a new record high in the third quarter, according to the Federal Reserve Bank of New York.
Up until recently, most Americans benefited from a few government-supplied safety nets, most notably the large injection of stimulus money, which left many households sitting on a stockpile of cash that enabled some cardholders to keep their credit card balances in check.
But that cash reserve is largely gone after consumers gradually spent down their excess savings from the Covid-19 pandemic years.
It is absolutely insane to me that anyone thinks the stimulus money left households sitting on a stockpile of cash.
As though millions of people on the edge of poverty sat like dragons upon a mountain of wealth.
Seriously, they don't even have a grasp on how little that money was even worth. That shit evaporated the instant it arrived just to pay off some of the interest on existing debt.
There are a lot of people conditioned to see the little guy getting money as some kind of affront to freedom. Most of them are the little guy as well, unfortunately.
That's the wild part. We got like two or three checks of $1200, 800, and like $400 or something similar. Less than $2500. That's not a stockpile. A stockpile would be if we all had an extra $20-40k just sitting and no debt.
It's the people who got laid off or partially laid off that got a good deal. The 600/week unemployment was a lot if money for people, especially if you still were getting most of a paycheck.
Lol. The PPP loans is where all the money disappeared to. Yes people got some money but it was spent for necessities, and to be honest it wasn't even that much. Some business got hundreds of thousands to millions of dollars that the government is still trying to recover which they probably never will.
I knew some bank folks. From what I heard, large amounts of the PPP loan money sat in the bank because some banks had trouble giving the money out. That extra money earned the banks a hefty amount of interest, and the C-suites of the bank made-off with a huge chunk of year-end bonus as a result. So while it isn't directly the PPP loan money, the bankers made a lot of money off of it.
The PPP loans that they were able to give out went to some small businesses and a large percentage of that money were forgiven. But some small businesses also had some trouble getting their loans forgiven due to either bad documentation / application / or the bank that gave them the loan did a poor job of filing the paperwork. So some of those businesses were stuck with a loan that they had to pay back or is waiting for it to be properly processed.
And of course there are a lot of fraud, too.
Companies continue to raise prices to unheard of levels to keep raking in obscene profits. They brag about it on their earnings calls.
Inflation isn’t the problem. Corporate greed is. Yet again.
🌍👨🚀🔫🧑🚀
What I really need right now is yet another article explaining to me how I'm actually better off now than I was a year or two ago, I'm just too stupid or whatever to realize it. Inflation was kicking our ass, and then we had two separate student loans kick in at once, on top of taking on a shitton of debt to take care of some of the broke boomers in our lives.
Have you tried any of the following:
- Stop buying avocado toast
- Pull yourself up by your bootstrap
- Not being poor
/s
on top of taking on a shitton of debt to take care of some of the broke boomers in our lives
You might consider making some different choices
Two years ago it was 2021 and a lot of lower wage people hope laid off, so yeah, they are better off now than two years ago
20% inflation since the start of the pandemic (higher on necessities like food and shelter), stagnant wages, massive wealth concentration and transfer from the poor and middle class to the rich… not surprising at all. Between wealth inequality, climate change, and political unrest, we are heading towards major societal collapse.
Makes me wonder how people are managing it.
I get paid every 2 weeks and I go through and pay down or pay off all my cards every payday.
When I put them back in my wallet, I put the paid off cards in first, and the not paid off cards upside down so I don't unintentionally add more debt to them.
As of last Friday, I have two cards that are not fully paid off. One with a 0% loan on a large electrical project, the 0% deal expires in April, but I expect to pay it off in January.
The other has a brand new $1,000 debt because I just paid my Christmas lights install company.
You really aren't the average person if you can pay $1000 to have your Christmas lights installed. I'm trying to even envision the Christmas light situation at your house that could possibly cost that much to put up. It must be impressive.
tl;dr: increased credit card usage
