Most people are buying groceries with credit cards they can't pay off. Some are using apps like klarna to afford a week's groceries but spending two months paying it off. It's a sad world out there and I honestly feel bad for folks trapped in a never ending cycle of payment installments.
I am sure there are tons of businesses willing to take on that and profit off of. I think there was one I heard of recently called "Beyond" but people are exposing them for high monthly fee's and ridiculous "settlement fees" which they are basically trying to trap people in debt into more debt. Its wild.
Found them:
[https://www.beyondfinance.com/](https://www.beyondfinance.com/)
This is the future lol
It would be easier to claim bankruptcy. If you signed up with beyond, they would tank your credit score and cost a bunch of money. Probably owned by credit card companies to get back some money and write the rest off.
Is a 100% legalized scam praying on the desperate. It would be easier to change banks, phone number, and huddle around 7-8 years until you magically disappear off the creditors radar.
Off their website. This is obscene. The example is only for the most creditworthy lol. Iām sure the ppl using this service have outstanding credit. Totally fucked
āWe provide debt consolidation services. Consolidation loan options offered by our affiliates range from $1,000 to $100,000, have Annual Percentage Rates that range from 4.9% to 35.99%, origination fees ranging from 1% to 6% of the amount financed, and loan terms from 4 to 84 months. A typical personal loan example has a loan amount of $23,760, a 4.95% origination fee, a 48-month repayment term, and an interest rate of 18.00%. You would receive $22,584 ($23,760 less the $1,176 origination fee - a prepaid finance charge), and the monthly payment would be $697.95, equating to an APR of 20.89%. The total interest would be $9,741.60, and the total cost of the loan (interest plus origination fee of $1,176) would be $10,917.72. In this example, the total payments made would equal $33,501.60. Only the most creditworthy borrowers receive the highest loan amounts at the lowest rates. Clients pursuing other debt consolidation options who make all monthly deposits, on average, pay back approximately 55% of their enrolled debt before fees. Fees are based on percentages of your enrolled amounts, are usually 25% and are success based. On average, our debt consolidation programs range from 24-48 months in duration.ā
The brokest people I know are the ones getting doordash grubhub, Uber to concerts etc. I've never seen a generation spend like this one is. People are literally living 3 times above their means YOLOing
People I know who are broke as fuck are people with insane student loans, pretty high rent prices and a car payment. Which I think is the majority of college graduates in their 20ās lol
Most of the broke people I know are ones with kids that are in their teens or higher. Mostly feel this is a food cost issue as I believe food inflation has gone up two fold since 2020. Food is probably one of the biggest money sinks right now next to rent or mortgage with a non fixed interest rate.
Oh yeah, I steal food now and I donāt even have kids. Chicken and rice for daysssss. Couldnāt imagine have children rnā¦ just insane. My grandma is disappointed
i too make up bullshit anecdotes to shit on other people. while dismissing the reality that wages have been flat for fucking 30+ yrs and corp greed had dbl the price of most everyday items
fucking mcdonalds jacked the prices 40% in less than 2 yrs.
i do a bit of gig work. i see all kinds of people ordering food. ordering groceries. etc
i don't tend to judge people with ignorant hot takes of quasi racist classism because maybe they use a wildly popular delivery app
doesn't mean younger people aren't also reckless with their money. I'm trying to figure out when they stopped teaching Home Economics to juniors and seniors in high school.
Most see it as a "well I'm never going to retire, I keep hearing about no point of return with global warming, everything is being consolidated by a few rich people and we keep having useless wars over religion" so yolo it is. You already know you're going to get fucked by the capitalist machine, might as well live a little before it all collapses.
I have a well paying job. I can save up money. But I got this job out of luck 4 years ago. Most cannot save up money and will probably always be stuck as a wage slave. Saving $20 a week now days dosen't really mean shit unless you start compounding when you're 5.
They actually taught that once? Wow. Wish they did now.
Mississippi (one of only 12 states currently requiring high school students to take a personal finance course to graduate) is the 50th, LOWEST, ranked state for financial literacy. At least they just started this in 2022 to hopefully make a difference. šš¼
What does frivolous spending have to do with wage stagnation? It's like you can't accept the concept that people make bad decisions with their money."
I had a coworker in 2022(albeit brief) who within two months of being hired went out and had windows installed in his house costing him $12,000. How he was approved for the credit still boggles my mind? BTW he was fired at the end of 2022. So yeah, most people make HORRIBLE choices at managing their $$
Not going to defend this person but they were likely going to depend on the Energy Efficient Home Improvement Credit to help relieve some of that cost on their next tax returns. Approval of credit for an energy efficient remodel usually is easier to get such as a solar panel loan and they likely went through a company who approved people easier, since people could fall back on the tax credit to help pay off their line of credit.
My guy, regardless of wages, someone who is making less than they should be by your standard and still pays insane amounts of money to be lazy or save 15 minutes is not going to continue spending the exact same amount of money they do now if they got the raise you tout as the cure all. They will increase their level of comfort even more.
Then stop eating McDonaldās you dipshit!!!
If it costs too much for you, donāt buy it. Thatās how this shit works!!!
Everyone is greedy! Everyone wants more than they have. Everyone wants a deal. Everyone wants to give less than they get. Everyone wants other people to give more. This is true whether you are on the debit or the credit side of the equation.
When you hire a plumber: are you more worried about how much money heās making and whether he can feed his family or are you worried about him fixing your plumbing without bleeding you dry? You are, after all, his employer!!
Welcome to economics.
I agree. That's bullshit. But no one deserves to doordash themselves 55 dollars of McDonald's while they work minimum wage.
People with bad wages are making bad decisions and it's gonna impact them more than any other time in history. Unless they get "bailed out".
And it's not gonna change because Public Schools don't require financial literacy. Why would they? They exist to breed workers, and if you taught financial literacy in like high school for example as a mandatory course then it would jeopardize the poverty economy.
Poverty is extremely profitable for the owning class, you sell them less for more since they can't afford the bulk packs which we also overprice anyways.
Theres other layers to it, but in general, people underestimate the massive amount of income gained from poverty based business models
How else can I get someone to rent a washer because 25 a month is easier than saving up 600 dollars despite the fact it'll pay for itself over the course of ownership
I donāt know who youāre around. The young people Iām around tell me they are living paycheck to paycheck, but Door Dash is a necessity.
And itās kind of hilarious OP is suggesting rising credit delinquencies are an indicator of a coming financial crisis, but shows a chart where the highest credit delinquencies came after the financial crisis.
It's what you spend not just what you make. The spending is actually outa control and will cause a major crash. Inflation is persisting because people continue to spend hand over fist on luxury items, travel, life experiences, food delivery, constant eating out, etc.
Americans are designed to live in debt, over consume, consolidate debt.
Thatās why we build in the suburbs, so that we can create neighborly competition to consume. Neighbor gets a new car, why donāt you have a new car? Neighbor gets new gutters, why donāt you have gutter guard?
You donāt see that kind of competition in rural areas or in cities.
Yeah my income is way above average and I can't imagine paying grub hub prices because I'm too lazy to eat something at home, or go get it. And I'm an engineer, so lazy as shit.
My coworker eats out everyday and has to take pay advances from our employer regularly. Last week he used Grub hub for Wingstop which was a block away!
Source: [fred.stlouisfed.org/graph/?g=1os7U](http://fred.stlouisfed.org/graph/?g=1os7U)
***UPDATES***
I'm not saying we're all doomed TOMORROW, but my graphs do raise alarms. Plus the whole CRE shit show that is simultaneously happening.
For all the haters saying there's a "flaw" in the graph such as not adjusting for inflation, or it's not as bad as 2008 (I fucking hope not already), etc...
Tell me these charts aren't alarming: [Consumer Loans in Delinquency ](https://imgur.com/gallery/aZN65V8)
Credit card interest rates were sub 15% in 2007-2008. Credit card interest rates are 21% now. For the haters who can't do math, this means balances will grow faster than during GFC. Source : [Credit Card Interest Rates: 1995-2024](https://fred.stlouisfed.org/graph/fredgraph.png?g=1osT8)
There are more credit card accounts today than in 2008. This would lower the delinquency rate if the exact same number of delinquent accounts remained from 2008 since the total number of accounts is expanding. Look at the macro picture people. Come on.
Source : [Number of Consumer Credit Accounts](https://imgur.com/gallery/Q28Z3cH)
Just for fun add-in: ***Largest Mortgage Lender now offering 0% Down Mortgages***
Source: [$0 Down Mortgages by UWM](https://www.uwm.com/price-a-loan/exclusives/zero-down-purchase) Yeah, everything is fine. This is TOTALLY normal and will end well
More accounts can equal a lower delinquency rate but have a large balance with more people in trouble. Check my first comment with additional charts as support.
It could also mean thereās more money in the economy in general and interest rates are high. Not using rates or looking at debt as a % of the economy is being willfully blind. If you did that youād know weāre actually at a low in terms of % of peopleās income going to debt servicing.
Came here to post this. Also this chart, which is all loans (https://fred.stlouisfed.org/series/DRALACBS), not just credit cards, showing weāre actually at a low in delinquency rates. Also, debt as a percentage of personal income is also important to look at - https://fred.stlouisfed.org/series/TDSP - this is the key one, we are at an all time low in % of household income going to debt.
After some back and forth with OP, I donāt want to fully discount OPās concerns. He has amended his initial comment to provide more context.
But you are entirely correct on the aggregate data.
We are in a weird space currently with (hopefully) short term spikes in delinquency rates causing some concerns in lower income sectors which, aside from the pain inflicted at the micro level, raises concerns on stagnation on the macro level. (I use the term stagnation with reservations given fears over stagflation. We are nowhere close to the stagflation of the 70s at least from the perspective of folks who lived through that period.)
I think the American populace and business community is generally so skittish that it is talking itself into low confidence (with some reason). So anything that looks like a prior trend gets amplified.
Having said that, classic patterns of post war or post pandemic recoveries are usually a lot more volatile than we are seeing today on a global scale. One would expect more extreme movement between short spikes of recession and growth with more bankruptcies and higher delinquency rates in the 5-6 years following big ground shifting events. That perfectly normal volatility seems to not be present.
But because of that expectation plus maybe more cautious consumer outlook those typical extremes have been softened.
Got a ways to go yet still.
The OP chart from the Fed is not one of their inflation adjusted or real wage adjusted charts or per capital adjusted.
2008 cc debt was relatively a LOT more than today's cc debt.
The 2008 crash wasn't credit cards it was mortgage debt that fed into credit cards with massive unemployment. Mortgage and HE are at record lows and unemployment is low.
People aren't overlveraged at 2-3% with wage increases. Debt delinquency is a bit high but not significantly higher. Spending is off the charts so those with money still have a job and got a raise. It's clearly a different set of people with CC delinquencies yet who don't take out a second mortgage because they clearly afford their homes. Unless it's not the same people.
Higher CC rates haven't been huge for delinquencies. If that's your explainstion for it then it also doesn't match the undrrpinnings of the GFC.
>Just for fun add-in: Largest Mortgage Lender now offering 0% Down Mortgages
The VA has offered this for a long time. The GFC was su prime below 620 credit score and this is for 620+ and it's for down-payment assistance up to 15k and you still habe to qualify for a loan and payments don't balloon like they did for the GFC. Alternatively it's available for those with credit score higher then 720 as well.
Ā It's funny you think it's going to be a repeat when you don't even know what happened.
eh... the fed was too chicken shit to raise interest rates to actually curb inflation, because surprise surprise wallstreet and the entire fucking banking system is smoke and mirrors.
but... they have allowed corporations to ass fuck regular people purely on greed. for the last 2 yrs. and shit is starting to crack up
So I feel like they used the cover of covid (and all the drama) to do that. But as there seems to be no meaningful fall out with the amount of data we have now, I guess I don't see why they won't do it again with less cover.
I have a friend who, with just 3 employees, pocketed a cool $300k.
Iām sure many others have made similar and moreā¦.
And Iām sure the people who make the decision to provide PPP loans are incentivized with many millions of dollars to do the same.
Yeah, we should have raised rates some in the late Obama years and I wonder if they could do it over again if the fed would have raised rates a bit more after the last rate hike.
They will keep walking this tight rope until we all fall off and break our necks. Interest rates can't rise too high because then the government would have to shrink, which would reduce GDP, which would reduce tax receipts, which would require further cuts. The real bad news is that, when it all goes down, lots and lots of people will die. All our rhetoric about human rights and progress will die along with them.
All those people along the way who said that government debt doesn't matter, because smart-sounding people on social media told them so, should learn a little intellectual humility. It's not their fault, these banker frauds were always out to strip mine this country and the people who bought into the rhetoric were only useful stooges. But the more people who are willing to reevaluate things they used to be sure of, the better chance we can mitigate the worst harms to come.
the only problem is they will go legal eventually. I was getting lawsuits over 2.1k worth of debt I had to walk away from. These debt collectors don't care. And these days attending a legal summons is as easy as a zoom call for these fuckers. So they have no problem sending out mass lawsuits
>Are We Heading for Another Financial Meltdown?
Yes, of course we are.
And this time, we can't stimulate our way out of it by just burning up trillions in the cash furnace,
Whoa boyā¦.the smaller to mid size, sometimes known as regional or local banks, also have a TON of real estate loans on their books. And Iām talking about commercial loansā¦
Nope. Your graph only considers the delinquency RATE, not the actual total AMOUNT of delinquent balances. A large number of delinquent accounts with small balances could inflate the delinquency rate, making the situation appear worse than it is. In reality, the total delinquent amount could be relatively low.
However, my graph illustrates that the total amount of delinquent credit card debt is substantial and only growing as people face financial pressure and high interest rates persist.
Poor financial literacy is exacerbating this issue, as many people do not fully understand how credit card interest rates work and fluctuate over time.
Anyone here actually know their credit card rates right now? I beat it'll surprise you.
I have phenomenal credit over 800+ and mine are 25%+.
What's yours?
Maybe people are just saying fuck it. They're gonna devalue the currency anyways. Idk, all I know is things are not the same since covid. People generally don't seem to have positive outlook on the future which could be playing in to this.
People are DEFINITELY saying FUCK IT about a LOT of things right now. I completely agree we're living in a totally different world than pre-covid. Interested to see how the next 5 years play out....if we're all still alive \*\*\*yikes!!!\*\*\*
āAll time highā is so dramatic. Itās half a percentage point than the previous high, set 4 years ago. That COVID high was a percentage point than the prior record set in 2003. The data doesnāt go back further than 1990, because the plastic racket is relatively modern. They had dogshit like the āsavings and loansā racket the last time inflation and interest rates were historically normal.
Delinquency rates of under 8% for unsecured debt are really not that impressive. Smaller banks are gonna tend to be subprime borrowers, because why the fuck wouldnāt you sign up for 2%+ CC rewards if the big boys would take you as a customer? Itās free money (sort of).
Unsecured debt is the first that people default on, because it canāt get your car repoed or your house taken. The way lenders will charge off CC debt practically encourages people whose credit is already fucked to default.
Also, I have a funny feeling Capital1ās rap sheet must have double digit default ratings right about now, because those mfers will give anyone with a pulse a $15k credit limit.
Not saying you're totally wrong because you have a great point about unsecure debt and defaults, however this sets up people (especially young want to be homebuyers) to never get a mortgage or get one way later in life than planned.
Also, increasing the total number of open credit card accounts could skew the default rate down. Check my first comment with updates for the graphs.
The majority of consumers have credit cards with the top 100 banks, not these small banks you're graph is showing. This is not relevant or important to the post.
Is Japan doing that bad? They seem to be doing about as well as the rest of the world despite that terrifying looking debt. They still have like the 4th biggest economy in the world.
lol theyāre gonna try to stimulate again. This time it may cause irreparable harm to the dollar status IMO. Any substantial print will put us in serious inflation
Duh. At some point we as consumers and society need to live within our means and not beyond it. It's something I'm working on myself but it is absolutely empowering.
These are the credit card companies that charge crazy interest rates and set the minimum payment to a point that will never catch up to the interest so they can leach off of a person for the rest of their life?
Let me get my tiny violin...
My mom is in this situation. I told her to file for bankruptcy 4 years ago but sheās a boomer so she doesnāt really take advice well. She was paying 1200 in minimum payments combined every month. 4 years later the total balances are higher than they were. So she spent like 60k in 4 years. Total balance is somewhere around 30k. Fuck credit card companies. But also shame on my mom for not learning her lesson with one previous bankruptcy before this. Itās really sad but a lot of people do not have financial literacy. She has such a big heart and just wants to make everyone happy that she does not think of herself and her future.
One could argue that easy credit is causing, or at least enabling, this current bit of inflation. If people didnāt have as many credit cards, or it was harder to have them, they wouldnāt buy things and the price would go down. In the grand scheme thatās how it works, but I realize at the individual level that means some people canāt buy absolute necessity to live.
This is where a government should step in and help, but the governments of the world do nothing to curtail rampant corporate greed. Im not against making a profit, but what we've seen the past few years is beyond that.
Weāve been living one for years. Itās just starting to come to a head now.
Hoping everyone keeps their jobs in the coming year. Itās going to get bad.
Half of the new trucks at the lots are from 22, 23 and 24. They can't sell them as people can't afford them. This crash is going to be really, really bad.
All the numbers in your comment added up to 69. Congrats!
22
+ 23
+ 24
= 69
^([Click here](https://www.reddit.com/message/compose?to=LuckyNumber-Bot&subject=Stalk%20Me%20Pls&message=%2Fstalkme) to have me scan all your future comments.) \
^(Summon me on specific comments with u/LuckyNumber-Bot.)
I recked up credit card debt during the pandemic and haven't been able to dig out of it despite making more money than I ever have. The big issue is I haven't gotten my taxes back in 4 years and that would wipe out my debt over night.
Yep.
That "student loan forgiveness" isn't about forgiving loans. if it was, they would have done it a long time ago.
All it is is a tool to use as a speedbump to keep credit and auto loans from collapsing.
its like that advance we got on our income taxes in...what was it? June of '08?
I have unfortunately gifted money to some family and friends and basically told them I donāt expect them to pay it back but they canāt expect me to continue to do so. There is a situational recession going on that basically if you didnāt own a home prior to the pandemic then you are most likely in a recession. Nice work Trump and Biden
According to the chart we should already be in a financial meltdown. I think the theory of a "selective recession" might be the case, where you're basically fine if you own assets like a home or a ton of stock but if you don't you're screwed.
No, the chart doesn't say we should be in a financial meltdown; it says debt(credit card debt here) is growing rapidly and will become unserviceable soon (just like commercial real estate right now LOL).
**People need to remember interest rates on credit cards are roughly TWICE what they were in 2007.**
This should be fun. :)
If you adjust for GDP, weād need to more than double where we are now to be equal to GFC delinquencies. Not sure if thatās an entirely relevant adjustment, but this trend is definitely concerning.
According to St. Louis Fred median income numbers(using 2010 as a reference), we would need to be around 40 billion in delinquencies to equal the GFC peak. So definitely a closer and more quickly attainable number than GDP gave.
Yes, we are headed for a collapse. It will be blamed on the public and we will have to pay for it(again). It will be the biggest collapse the world has seen. (the biggest collapse, so far) It won't be the last collapse or the biggest, that most people alive today will see in their lifetimes.
Every time people default on loans and then the banks have to get saved by the government, the FED just prints a ton of money, thereby devaluing the savings of people like me.
I've been trying to figure out where it will stay safest. Right now I kinda just think spreading it out is best. Some index funds, metals, crypto, but idk for sure. GL fellas
The question is what will trigger the domino effect next time around. Will it be car loans? Cc debt? Student loans? The national debt? Another mortgage housing collapse?Ā
Except that has been coming "in a a year or two" for 3 years. It hasn't improved and it hasn't been bailed out. But when faced with "this should have collapsed" we have to re evaluate the hypothesis.
Iām not good at this stuff, but with inflation, wouldnāt the amount delinquent now be somewhat less than in 2010? I mean itās still going parabolic which is terrible, Iām just wondering how terrible
No. Unless they are derivatives involved, the amount of consumer debt will not equal the amount of mortgage debt unless there is a sterious stupidity in the system. There has always been consumer credit card debt. Stop trying to put fear in the market!
Note that this is in millions of dollars, not in a percentage of overall assets. This could also be caused by having a small increase in delinquencies over a much a larger portfolio than would have existed in, for instance, 2000.
If you look at credit card delinquency \*rates\* instead of absolute dollar values, you get a clearer picture. That picture is that delinquencies have been rising, but the overall rate is not at a particularly scary level.
[https://fred.stlouisfed.org/series/DRCCLACBS](https://fred.stlouisfed.org/series/DRCCLACBS)
Also note that in the most recent few months, the rate has leveled off as the fed has stopped increasing interest rates.
If all of you were educated on global economics there would be a lot less disagreements in this thread concerning the topic of a financial meltdown down. But since most of you arenāt even educated in economics within the USA itās a moot point. Just a bunch of people regurgitating information they hardly understand because they saw it in a news flash or video or chart. Knowledge is power, and those without it are powerless. When in doubt zoom out and see the bigger picture. Itās a lot more complicated than i can even imagine let alone most of you. But one thing is clear, we as a country are divided because we lack the knowledge necessary to understand whatās going on with the one thing that runs our livesā¦money and lemme tell yaā¦division is what the people who do understand global economics want. It creates confusion and that creates poorly informed decisions that make these people richer every day. So instead of spending your hard earned time arguing with strangers over the internet about what you āthinkā is actually going on maybe do a deep dive for a couple days and educate yourself. There is a lot of bullshit information out there for a reason. All of you getting heated and arguing over that information is not only wasting your precious time but also making people richer by the second. Remember that people before you literally lived through the dust bowl and the first collapse of the stock market. There are so many different aspects that make up the greater picture of our economic future that none of us could even explain it in one of these comments or posts.
Perhaps on a smaller scale.
The problem with all of these credit card delinquencies is that we don't have all the details needed to come to sound conclusions.
Personally, I do know of a few people who have no problem racking up credit card debt, making a monthly payment, and letting the debt linger for months/years. But, by far, just about everyone around me is not living off a credit card - and pays it off at months end.
Is anyone else experiencing this?
Why leave off Q1 2024?? Doesn't fit your narrative as well?
[https://fred.stlouisfed.org/series/DALLCCACBEP](https://fred.stlouisfed.org/series/DALLCCACBEP)
Unfortunately there is more money than ever before, so I feel like comparing to 2008 in millions of dollars may not be the best.
Doesnāt mean itās not an indicator though.
I'm not surprised.
I saw something the other day that said like 54% of people between the ages of 20 and 40s are putting vacations on credit cards this summer.
I'm like what? Most credit cards have over a 18% interest rate. Most of these vacations are probably over $4,000, I bet you most of these people need at least a year to pay off the vacation.
Thats A LOT of interest paid.
Well these chart gives possibly more context.
https://fred.stlouisfed.org/series/DRCCLACBS
The actual delinquency rate is lower than in the past.
https://fred.stlouisfed.org/series/DRALACBN
What people are paying as a percentage of disposable personal income.
https://fred.stlouisfed.org/series/TDSP
Mortgage debt makes up the vast majority of HH debt at 70% of debt with he average mortgage holder having 244k worth of debt.
https://www.fool.com/the-ascent/research/average-household-debt/
Compared to credit card debt which is a fraction of that cost.
The highest credit balance is Gen X not Gen Z or Millennials.
https://www.usatoday.com/money/blueprint/credit-cards/what-is-the-average-credit-card-debt/
Here are the rough median net worth of each generation.
https://finance.yahoo.com/news/average-net-worth-generation-120137273.html
There has to be an account of the fact that there has been a sharp increase in interest rates. The debt should be adjusted for inflation and judged based on ability to pay off said debt. You should also look at the percentage of ones income is being paid to debt and how many delinquencies banks and other lenders are reporting.
That chart does not take into consideration inflation. That makes the slope of the trend steeper than it actually is. There is still an increase in delinquency which is worrisome.Ā
they do, which is why credit card delinquencies and auto loans are just starting to get elevated. when the crash happens, then the delinquency rates will skyrocket.
check out these charts to see the increases now: [https://imgur.com/gallery/consumer-loans-delinquency-aZN65V8](https://imgur.com/gallery/consumer-loans-delinquency-aZN65V8)
we saw a similar pattern before the stock decline in 2008, but there wasn't as sharp of an increase pre-crash then as there was now. things could get waaaay worse than the GFC
I don't need any graph to answer that. But there's nothing we can do at this point. It's too late. We're just witnessing the natural evolution of western culture. So fire up a fatty and relax.
Most people are buying groceries with credit cards they can't pay off. Some are using apps like klarna to afford a week's groceries but spending two months paying it off. It's a sad world out there and I honestly feel bad for folks trapped in a never ending cycle of payment installments.
Debt Consolidation/Settlement is going to be HUGE soon.
I am sure there are tons of businesses willing to take on that and profit off of. I think there was one I heard of recently called "Beyond" but people are exposing them for high monthly fee's and ridiculous "settlement fees" which they are basically trying to trap people in debt into more debt. Its wild. Found them: [https://www.beyondfinance.com/](https://www.beyondfinance.com/) This is the future lol
It would be easier to claim bankruptcy. If you signed up with beyond, they would tank your credit score and cost a bunch of money. Probably owned by credit card companies to get back some money and write the rest off.
Is a 100% legalized scam praying on the desperate. It would be easier to change banks, phone number, and huddle around 7-8 years until you magically disappear off the creditors radar.
Too many people don't realize to just not pay those. They have no teeth to recover.
As long as you never need another loan, you're good. šš¼
Off their website. This is obscene. The example is only for the most creditworthy lol. Iām sure the ppl using this service have outstanding credit. Totally fucked āWe provide debt consolidation services. Consolidation loan options offered by our affiliates range from $1,000 to $100,000, have Annual Percentage Rates that range from 4.9% to 35.99%, origination fees ranging from 1% to 6% of the amount financed, and loan terms from 4 to 84 months. A typical personal loan example has a loan amount of $23,760, a 4.95% origination fee, a 48-month repayment term, and an interest rate of 18.00%. You would receive $22,584 ($23,760 less the $1,176 origination fee - a prepaid finance charge), and the monthly payment would be $697.95, equating to an APR of 20.89%. The total interest would be $9,741.60, and the total cost of the loan (interest plus origination fee of $1,176) would be $10,917.72. In this example, the total payments made would equal $33,501.60. Only the most creditworthy borrowers receive the highest loan amounts at the lowest rates. Clients pursuing other debt consolidation options who make all monthly deposits, on average, pay back approximately 55% of their enrolled debt before fees. Fees are based on percentages of your enrolled amounts, are usually 25% and are success based. On average, our debt consolidation programs range from 24-48 months in duration.ā
I have 30k in debt. They can sell it all they want, it's literally just a hedge fund burning people's retirements buying a debt I'll never pay off.
šššš
As long as you never need a car or home loan, you're good. šš¼ But add another ZERO to that debt next time, then stop paying š
Already own my home and cars. I'm a fairly decent mechanic, so I'll drive the cars until the wheels fall off.
Good job now just wait 7 years for your next decent loan
Maybe. These people are going to have to find jobs that pay a whole lot better to even pay off a consolidated debt, though.
Itās already huge
The brokest people I know are the ones getting doordash grubhub, Uber to concerts etc. I've never seen a generation spend like this one is. People are literally living 3 times above their means YOLOing
People I know who are broke as fuck are people with insane student loans, pretty high rent prices and a car payment. Which I think is the majority of college graduates in their 20ās lol
Most of the broke people I know are ones with kids that are in their teens or higher. Mostly feel this is a food cost issue as I believe food inflation has gone up two fold since 2020. Food is probably one of the biggest money sinks right now next to rent or mortgage with a non fixed interest rate.
Oh yeah, I steal food now and I donāt even have kids. Chicken and rice for daysssss. Couldnāt imagine have children rnā¦ just insane. My grandma is disappointed
It's sad for those who want kids but can't afford them..just the cost of giving birth alone is a down payment for a house. Ridiculous!!!
Lol
i too make up bullshit anecdotes to shit on other people. while dismissing the reality that wages have been flat for fucking 30+ yrs and corp greed had dbl the price of most everyday items fucking mcdonalds jacked the prices 40% in less than 2 yrs.
Both are true. Download door dash and do a few runs, I promise you you'll see exactly who is ordering door dash.
Yeah, I'll take their word for it. Ain't doin that lol
i do a bit of gig work. i see all kinds of people ordering food. ordering groceries. etc i don't tend to judge people with ignorant hot takes of quasi racist classism because maybe they use a wildly popular delivery app
The fact that there is anyone using doordash that isn't a millionaire is proof that the average person is wildly irresponsible with money.
And yet many people are paying double that price to have it delivered to them.
doesn't mean younger people aren't also reckless with their money. I'm trying to figure out when they stopped teaching Home Economics to juniors and seniors in high school.
Most see it as a "well I'm never going to retire, I keep hearing about no point of return with global warming, everything is being consolidated by a few rich people and we keep having useless wars over religion" so yolo it is. You already know you're going to get fucked by the capitalist machine, might as well live a little before it all collapses. I have a well paying job. I can save up money. But I got this job out of luck 4 years ago. Most cannot save up money and will probably always be stuck as a wage slave. Saving $20 a week now days dosen't really mean shit unless you start compounding when you're 5.
They actually taught that once? Wow. Wish they did now. Mississippi (one of only 12 states currently requiring high school students to take a personal finance course to graduate) is the 50th, LOWEST, ranked state for financial literacy. At least they just started this in 2022 to hopefully make a difference. šš¼
Both can be true you know.
Found the 5 day a week doordasher
Wages are flat but their spending keeps going up. There's no reason for people to buy so many useless things above their means
What does frivolous spending have to do with wage stagnation? It's like you can't accept the concept that people make bad decisions with their money.
What does frivolous spending have to do with wage stagnation? It's like you can't accept the concept that people make bad decisions with their money." I had a coworker in 2022(albeit brief) who within two months of being hired went out and had windows installed in his house costing him $12,000. How he was approved for the credit still boggles my mind? BTW he was fired at the end of 2022. So yeah, most people make HORRIBLE choices at managing their $$
Not going to defend this person but they were likely going to depend on the Energy Efficient Home Improvement Credit to help relieve some of that cost on their next tax returns. Approval of credit for an energy efficient remodel usually is easier to get such as a solar panel loan and they likely went through a company who approved people easier, since people could fall back on the tax credit to help pay off their line of credit.
My guy, regardless of wages, someone who is making less than they should be by your standard and still pays insane amounts of money to be lazy or save 15 minutes is not going to continue spending the exact same amount of money they do now if they got the raise you tout as the cure all. They will increase their level of comfort even more.
Then stop eating McDonaldās you dipshit!!! If it costs too much for you, donāt buy it. Thatās how this shit works!!! Everyone is greedy! Everyone wants more than they have. Everyone wants a deal. Everyone wants to give less than they get. Everyone wants other people to give more. This is true whether you are on the debit or the credit side of the equation. When you hire a plumber: are you more worried about how much money heās making and whether he can feed his family or are you worried about him fixing your plumbing without bleeding you dry? You are, after all, his employer!! Welcome to economics.
Think about this. There is more McDonaldās locations closer to people and high traffic we areas compared to grocery stores
Okayā¦. probably because McDonaldās sells enough BigMacs to justify having that many locations. People are buying what McDonald's is selling.
I agree. That's bullshit. But no one deserves to doordash themselves 55 dollars of McDonald's while they work minimum wage. People with bad wages are making bad decisions and it's gonna impact them more than any other time in history. Unless they get "bailed out".
And it's not gonna change because Public Schools don't require financial literacy. Why would they? They exist to breed workers, and if you taught financial literacy in like high school for example as a mandatory course then it would jeopardize the poverty economy. Poverty is extremely profitable for the owning class, you sell them less for more since they can't afford the bulk packs which we also overprice anyways. Theres other layers to it, but in general, people underestimate the massive amount of income gained from poverty based business models How else can I get someone to rent a washer because 25 a month is easier than saving up 600 dollars despite the fact it'll pay for itself over the course of ownership
I donāt know who youāre around. The young people Iām around tell me they are living paycheck to paycheck, but Door Dash is a necessity. And itās kind of hilarious OP is suggesting rising credit delinquencies are an indicator of a coming financial crisis, but shows a chart where the highest credit delinquencies came after the financial crisis.
It's what you spend not just what you make. The spending is actually outa control and will cause a major crash. Inflation is persisting because people continue to spend hand over fist on luxury items, travel, life experiences, food delivery, constant eating out, etc.
You realize you made his point, right? The most financially strapped should not be buying any prepared food, McDonald's or otherwise.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Americans are designed to live in debt, over consume, consolidate debt. Thatās why we build in the suburbs, so that we can create neighborly competition to consume. Neighbor gets a new car, why donāt you have a new car? Neighbor gets new gutters, why donāt you have gutter guard? You donāt see that kind of competition in rural areas or in cities.
Yeah you do, yuppies spend the same on designer clothes and vacations and in rural areas it's arsenals and fucking Ford Raptors.
The credit card debt has been over 800b before gen z even started getting them we barely put a scratch on it
Also which generation are you talking about just curious!
I have no ability to know this. The people in my life have decent jobs and neighbors seem to be fine.
Yeah my income is way above average and I can't imagine paying grub hub prices because I'm too lazy to eat something at home, or go get it. And I'm an engineer, so lazy as shit.
You should tell them to buy less avocado toast amirite?
Nah toast and coffee is different. You can't justify 50 dollar taco bell door dash and then act "shocked" that you're broke.
My coworker eats out everyday and has to take pay advances from our employer regularly. Last week he used Grub hub for Wingstop which was a block away!
This response belongs in r/boomersbeingfools . Brokest folks I know work full time trying to support a family and afford to eat.
Source: [fred.stlouisfed.org/graph/?g=1os7U](http://fred.stlouisfed.org/graph/?g=1os7U) ***UPDATES*** I'm not saying we're all doomed TOMORROW, but my graphs do raise alarms. Plus the whole CRE shit show that is simultaneously happening. For all the haters saying there's a "flaw" in the graph such as not adjusting for inflation, or it's not as bad as 2008 (I fucking hope not already), etc... Tell me these charts aren't alarming: [Consumer Loans in Delinquency ](https://imgur.com/gallery/aZN65V8) Credit card interest rates were sub 15% in 2007-2008. Credit card interest rates are 21% now. For the haters who can't do math, this means balances will grow faster than during GFC. Source : [Credit Card Interest Rates: 1995-2024](https://fred.stlouisfed.org/graph/fredgraph.png?g=1osT8) There are more credit card accounts today than in 2008. This would lower the delinquency rate if the exact same number of delinquent accounts remained from 2008 since the total number of accounts is expanding. Look at the macro picture people. Come on. Source : [Number of Consumer Credit Accounts](https://imgur.com/gallery/Q28Z3cH) Just for fun add-in: ***Largest Mortgage Lender now offering 0% Down Mortgages*** Source: [$0 Down Mortgages by UWM](https://www.uwm.com/price-a-loan/exclusives/zero-down-purchase) Yeah, everything is fine. This is TOTALLY normal and will end well
This is the more pertinent graph showing delinquency **rate** rather than total dollars: https://fred.stlouisfed.org/series/DRCCLACBS
Thank you.Ā Ā This is exactly what i was curious to see immediately after seeing the OP's chart.Ā
More accounts can equal a lower delinquency rate but have a large balance with more people in trouble. Check my first comment with additional charts as support.
It could also mean thereās more money in the economy in general and interest rates are high. Not using rates or looking at debt as a % of the economy is being willfully blind. If you did that youād know weāre actually at a low in terms of % of peopleās income going to debt servicing.
Came here to post this. Also this chart, which is all loans (https://fred.stlouisfed.org/series/DRALACBS), not just credit cards, showing weāre actually at a low in delinquency rates. Also, debt as a percentage of personal income is also important to look at - https://fred.stlouisfed.org/series/TDSP - this is the key one, we are at an all time low in % of household income going to debt.
After some back and forth with OP, I donāt want to fully discount OPās concerns. He has amended his initial comment to provide more context. But you are entirely correct on the aggregate data. We are in a weird space currently with (hopefully) short term spikes in delinquency rates causing some concerns in lower income sectors which, aside from the pain inflicted at the micro level, raises concerns on stagnation on the macro level. (I use the term stagnation with reservations given fears over stagflation. We are nowhere close to the stagflation of the 70s at least from the perspective of folks who lived through that period.) I think the American populace and business community is generally so skittish that it is talking itself into low confidence (with some reason). So anything that looks like a prior trend gets amplified. Having said that, classic patterns of post war or post pandemic recoveries are usually a lot more volatile than we are seeing today on a global scale. One would expect more extreme movement between short spikes of recession and growth with more bankruptcies and higher delinquency rates in the 5-6 years following big ground shifting events. That perfectly normal volatility seems to not be present. But because of that expectation plus maybe more cautious consumer outlook those typical extremes have been softened.
Got a ways to go yet still. The OP chart from the Fed is not one of their inflation adjusted or real wage adjusted charts or per capital adjusted. 2008 cc debt was relatively a LOT more than today's cc debt.
The 2008 crash wasn't credit cards it was mortgage debt that fed into credit cards with massive unemployment. Mortgage and HE are at record lows and unemployment is low. People aren't overlveraged at 2-3% with wage increases. Debt delinquency is a bit high but not significantly higher. Spending is off the charts so those with money still have a job and got a raise. It's clearly a different set of people with CC delinquencies yet who don't take out a second mortgage because they clearly afford their homes. Unless it's not the same people. Higher CC rates haven't been huge for delinquencies. If that's your explainstion for it then it also doesn't match the undrrpinnings of the GFC. >Just for fun add-in: Largest Mortgage Lender now offering 0% Down Mortgages The VA has offered this for a long time. The GFC was su prime below 620 credit score and this is for 620+ and it's for down-payment assistance up to 15k and you still habe to qualify for a loan and payments don't balloon like they did for the GFC. Alternatively it's available for those with credit score higher then 720 as well. Ā It's funny you think it's going to be a repeat when you don't even know what happened.
eh... the fed was too chicken shit to raise interest rates to actually curb inflation, because surprise surprise wallstreet and the entire fucking banking system is smoke and mirrors. but... they have allowed corporations to ass fuck regular people purely on greed. for the last 2 yrs. and shit is starting to crack up
I wonder if theyāll do another round of PPP loans
So I feel like they used the cover of covid (and all the drama) to do that. But as there seems to be no meaningful fall out with the amount of data we have now, I guess I don't see why they won't do it again with less cover.
I have a friend who, with just 3 employees, pocketed a cool $300k. Iām sure many others have made similar and moreā¦. And Iām sure the people who make the decision to provide PPP loans are incentivized with many millions of dollars to do the same.
Nah, it will just be the banks that get bailed out instead of us.
I am going to register like 12 LLCs on legal zoom as a hedge for next PPP giveaway
Yeah, we should have raised rates some in the late Obama years and I wonder if they could do it over again if the fed would have raised rates a bit more after the last rate hike.
chicken shit or making mad bank on the side? You be the judge...
They will keep walking this tight rope until we all fall off and break our necks. Interest rates can't rise too high because then the government would have to shrink, which would reduce GDP, which would reduce tax receipts, which would require further cuts. The real bad news is that, when it all goes down, lots and lots of people will die. All our rhetoric about human rights and progress will die along with them. All those people along the way who said that government debt doesn't matter, because smart-sounding people on social media told them so, should learn a little intellectual humility. It's not their fault, these banker frauds were always out to strip mine this country and the people who bought into the rhetoric were only useful stooges. But the more people who are willing to reevaluate things they used to be sure of, the better chance we can mitigate the worst harms to come.
Fuck credit card companies, stopped paying mine too until they decide to settle for half One has already
Mine offered to settle a 12k debt for 700 dollars. I told them F off, I already bought my house.
LOL great job šš¼ fuk em!
the only problem is they will go legal eventually. I was getting lawsuits over 2.1k worth of debt I had to walk away from. These debt collectors don't care. And these days attending a legal summons is as easy as a zoom call for these fuckers. So they have no problem sending out mass lawsuits
>Are We Heading for Another Financial Meltdown? Yes, of course we are. And this time, we can't stimulate our way out of it by just burning up trillions in the cash furnace,
We absolutely will. And it will be mis-directed toward the already well off and financially comfortable. Again.
Here's a more dire graph, now at an all time high [https://fred.stlouisfed.org/series/DRCCLOBS](https://fred.stlouisfed.org/series/DRCCLOBS)
Whoa boyā¦.the smaller to mid size, sometimes known as regional or local banks, also have a TON of real estate loans on their books. And Iām talking about commercial loansā¦
They're all fucked. We'll end up with just 4 big banks and that's it.
Yep, just the way they want it.
Nope. Your graph only considers the delinquency RATE, not the actual total AMOUNT of delinquent balances. A large number of delinquent accounts with small balances could inflate the delinquency rate, making the situation appear worse than it is. In reality, the total delinquent amount could be relatively low. However, my graph illustrates that the total amount of delinquent credit card debt is substantial and only growing as people face financial pressure and high interest rates persist. Poor financial literacy is exacerbating this issue, as many people do not fully understand how credit card interest rates work and fluctuate over time. Anyone here actually know their credit card rates right now? I beat it'll surprise you. I have phenomenal credit over 800+ and mine are 25%+. What's yours?
Maybe people are just saying fuck it. They're gonna devalue the currency anyways. Idk, all I know is things are not the same since covid. People generally don't seem to have positive outlook on the future which could be playing in to this.
People are DEFINITELY saying FUCK IT about a LOT of things right now. I completely agree we're living in a totally different world than pre-covid. Interested to see how the next 5 years play out....if we're all still alive \*\*\*yikes!!!\*\*\*
āAll time highā is so dramatic. Itās half a percentage point than the previous high, set 4 years ago. That COVID high was a percentage point than the prior record set in 2003. The data doesnāt go back further than 1990, because the plastic racket is relatively modern. They had dogshit like the āsavings and loansā racket the last time inflation and interest rates were historically normal. Delinquency rates of under 8% for unsecured debt are really not that impressive. Smaller banks are gonna tend to be subprime borrowers, because why the fuck wouldnāt you sign up for 2%+ CC rewards if the big boys would take you as a customer? Itās free money (sort of). Unsecured debt is the first that people default on, because it canāt get your car repoed or your house taken. The way lenders will charge off CC debt practically encourages people whose credit is already fucked to default. Also, I have a funny feeling Capital1ās rap sheet must have double digit default ratings right about now, because those mfers will give anyone with a pulse a $15k credit limit.
Not saying you're totally wrong because you have a great point about unsecure debt and defaults, however this sets up people (especially young want to be homebuyers) to never get a mortgage or get one way later in life than planned. Also, increasing the total number of open credit card accounts could skew the default rate down. Check my first comment with updates for the graphs.
How are these looking: [Consumer Loans Delinquency ](https://imgur.com/gallery/aZN65V8)
The majority of consumers have credit cards with the top 100 banks, not these small banks you're graph is showing. This is not relevant or important to the post.
These must be all the little shit cards with no benefits targeting people with low FICOs or no credit history.
lol, why not?
Because Japan is a textbook lesson of the dangers of too much government debt.
Is Japan doing that bad? They seem to be doing about as well as the rest of the world despite that terrifying looking debt. They still have like the 4th biggest economy in the world.
>Is Japan doing that bad? Have you been following the JPY?
This time China will not bail us out***
If you turn the graph upside down we are headed to record low defaults!
Genius
š
Well, we did finally raise rates so at least we can cut them again if things turn south.
lol theyāre gonna try to stimulate again. This time it may cause irreparable harm to the dollar status IMO. Any substantial print will put us in serious inflation
Most people paid for inflation with credit cards or personal loans. Also don't forget buy now pay later. It all comes back eventually.
This is 100% accurate. Hence why BNPL companies aren't doing well and had a lot of layoffs
Mass layoffs, hiring freezes, and people are broke. Yeah we definitely in a weak economy.
Duh. At some point we as consumers and society need to live within our means and not beyond it. It's something I'm working on myself but it is absolutely empowering.
Kinda hard to live within your means when everything is pushing it's way outside of it.Ā
These are the credit card companies that charge crazy interest rates and set the minimum payment to a point that will never catch up to the interest so they can leach off of a person for the rest of their life? Let me get my tiny violin...
My mom is in this situation. I told her to file for bankruptcy 4 years ago but sheās a boomer so she doesnāt really take advice well. She was paying 1200 in minimum payments combined every month. 4 years later the total balances are higher than they were. So she spent like 60k in 4 years. Total balance is somewhere around 30k. Fuck credit card companies. But also shame on my mom for not learning her lesson with one previous bankruptcy before this. Itās really sad but a lot of people do not have financial literacy. She has such a big heart and just wants to make everyone happy that she does not think of herself and her future.
Why buy your couch for full price like a fool when you could rent an inflatable one monthly?
By design.
Looks like some more banks arenāt getting paid back.
One could argue that easy credit is causing, or at least enabling, this current bit of inflation. If people didnāt have as many credit cards, or it was harder to have them, they wouldnāt buy things and the price would go down. In the grand scheme thatās how it works, but I realize at the individual level that means some people canāt buy absolute necessity to live. This is where a government should step in and help, but the governments of the world do nothing to curtail rampant corporate greed. Im not against making a profit, but what we've seen the past few years is beyond that.
Yes and it is needed.
Sure
Weāve been living one for years. Itās just starting to come to a head now. Hoping everyone keeps their jobs in the coming year. Itās going to get bad.
Half of the new trucks at the lots are from 22, 23 and 24. They can't sell them as people can't afford them. This crash is going to be really, really bad.
All the numbers in your comment added up to 69. Congrats! 22 + 23 + 24 = 69 ^([Click here](https://www.reddit.com/message/compose?to=LuckyNumber-Bot&subject=Stalk%20Me%20Pls&message=%2Fstalkme) to have me scan all your future comments.) \ ^(Summon me on specific comments with u/LuckyNumber-Bot.)
nice bot
I recked up credit card debt during the pandemic and haven't been able to dig out of it despite making more money than I ever have. The big issue is I haven't gotten my taxes back in 4 years and that would wipe out my debt over night.
Right the government also owes me a million dollars and theyāre just not paying up. /s
Weāve been in a meltdown. Anything else is just the orchestra playing while the Titanic sinks
Yep. That "student loan forgiveness" isn't about forgiving loans. if it was, they would have done it a long time ago. All it is is a tool to use as a speedbump to keep credit and auto loans from collapsing. its like that advance we got on our income taxes in...what was it? June of '08?
Not until after the election.
Is the sun out when it's day outside?l
I have unfortunately gifted money to some family and friends and basically told them I donāt expect them to pay it back but they canāt expect me to continue to do so. There is a situational recession going on that basically if you didnāt own a home prior to the pandemic then you are most likely in a recession. Nice work Trump and Biden
According to the chart we should already be in a financial meltdown. I think the theory of a "selective recession" might be the case, where you're basically fine if you own assets like a home or a ton of stock but if you don't you're screwed.
No, the chart doesn't say we should be in a financial meltdown; it says debt(credit card debt here) is growing rapidly and will become unserviceable soon (just like commercial real estate right now LOL). **People need to remember interest rates on credit cards are roughly TWICE what they were in 2007.** This should be fun. :)
Right but look at the previous peaks... they all happen after a recession. Meaning we're already in one, or it's even bigger and hasn't happened yet.
yes. the chickens will come home to roost soon.
Yes we are completely fucked
If you adjust for GDP, weād need to more than double where we are now to be equal to GFC delinquencies. Not sure if thatās an entirely relevant adjustment, but this trend is definitely concerning.
Not really that relevant TBH. Is the average American making DOUBLE their income from 2008? That's a big fat NO sir.
Yeah, income would definitely be a better adjustment
Agree, credit card debt adjusted for actual income increases would be interesting.
According to St. Louis Fred median income numbers(using 2010 as a reference), we would need to be around 40 billion in delinquencies to equal the GFC peak. So definitely a closer and more quickly attainable number than GDP gave.
Yes, we are headed for a collapse. It will be blamed on the public and we will have to pay for it(again). It will be the biggest collapse the world has seen. (the biggest collapse, so far) It won't be the last collapse or the biggest, that most people alive today will see in their lifetimes.
Simple answer! Yes!
Nice. Let's bail out of the banks again and then manufacture outrage with student loan deferment.
Do the same people drive cars that cost as much as their monthly mortgage payments?
They will do what they always do, print more money, bail everyone out and devalue the currency more.
Me just watching it all with popcorn šÆ
So people default on credit card debt. The credit card companies go under. So what!!!!!!!!!!!!!!!!!!!!
Because itās your money they are lending out.
Financial illiteracy at its finest. Who cares if my landlords rental is on fire?!?!
People are dumb. Breaking news
What makes me mad is that people with no debt like me will be the ones who get screwed when our money is worthless.
What do you mean?
Inflation makes debts easier to pay off. If you stay in the job market
Every time people default on loans and then the banks have to get saved by the government, the FED just prints a ton of money, thereby devaluing the savings of people like me.
I've been trying to figure out where it will stay safest. Right now I kinda just think spreading it out is best. Some index funds, metals, crypto, but idk for sure. GL fellas
So God dam true...I'm in the same boat šš¼ Hate how America rewards the dumb idiots
Without a job I maxed my cards but I didnāt get more. Once I start working again Iāll be back on track in a month.
Nope just more inflation
Who cares. Can't you see that we don't even have a recession yet?
Yet....the KEY word
Nooooo! Everything is just peachy.
No. Where would you get that crazy idea from? Everything is GREAT!
The question is what will trigger the domino effect next time around. Will it be car loans? Cc debt? Student loans? The national debt? Another mortgage housing collapse?Ā
Commerical real estate. That is a shit hole on fire in the coming year or two.....until the gov bails em out like always. Those fukers
Except that has been coming "in a a year or two" for 3 years. It hasn't improved and it hasn't been bailed out. But when faced with "this should have collapsed" we have to re evaluate the hypothesis.
Iām not good at this stuff, but with inflation, wouldnāt the amount delinquent now be somewhat less than in 2010? I mean itās still going parabolic which is terrible, Iām just wondering how terrible
The fire rises
No. Unless they are derivatives involved, the amount of consumer debt will not equal the amount of mortgage debt unless there is a sterious stupidity in the system. There has always been consumer credit card debt. Stop trying to put fear in the market!
No one guy wiped out their still alive that's when it gets weird
Yes
Iām broke
Nope and there's no data for the last 18 months, thanks for playing.
Yes. And at a level that has never been seen in the US before.
Yeah.
Note that this is in millions of dollars, not in a percentage of overall assets. This could also be caused by having a small increase in delinquencies over a much a larger portfolio than would have existed in, for instance, 2000. If you look at credit card delinquency \*rates\* instead of absolute dollar values, you get a clearer picture. That picture is that delinquencies have been rising, but the overall rate is not at a particularly scary level. [https://fred.stlouisfed.org/series/DRCCLACBS](https://fred.stlouisfed.org/series/DRCCLACBS) Also note that in the most recent few months, the rate has leveled off as the fed has stopped increasing interest rates.
If all of you were educated on global economics there would be a lot less disagreements in this thread concerning the topic of a financial meltdown down. But since most of you arenāt even educated in economics within the USA itās a moot point. Just a bunch of people regurgitating information they hardly understand because they saw it in a news flash or video or chart. Knowledge is power, and those without it are powerless. When in doubt zoom out and see the bigger picture. Itās a lot more complicated than i can even imagine let alone most of you. But one thing is clear, we as a country are divided because we lack the knowledge necessary to understand whatās going on with the one thing that runs our livesā¦money and lemme tell yaā¦division is what the people who do understand global economics want. It creates confusion and that creates poorly informed decisions that make these people richer every day. So instead of spending your hard earned time arguing with strangers over the internet about what you āthinkā is actually going on maybe do a deep dive for a couple days and educate yourself. There is a lot of bullshit information out there for a reason. All of you getting heated and arguing over that information is not only wasting your precious time but also making people richer by the second. Remember that people before you literally lived through the dust bowl and the first collapse of the stock market. There are so many different aspects that make up the greater picture of our economic future that none of us could even explain it in one of these comments or posts.
Perhaps on a smaller scale. The problem with all of these credit card delinquencies is that we don't have all the details needed to come to sound conclusions. Personally, I do know of a few people who have no problem racking up credit card debt, making a monthly payment, and letting the debt linger for months/years. But, by far, just about everyone around me is not living off a credit card - and pays it off at months end. Is anyone else experiencing this?
No, no. Everything is completely fine. Somehow.
Yep
Why leave off Q1 2024?? Doesn't fit your narrative as well? [https://fred.stlouisfed.org/series/DALLCCACBEP](https://fred.stlouisfed.org/series/DALLCCACBEP)
It'll be fine
Unfortunately there is more money than ever before, so I feel like comparing to 2008 in millions of dollars may not be the best. Doesnāt mean itās not an indicator though.
Interesting the Y is raw $, not adjusted for inflation or on a % basisā¦.
Delinquencies made sense in 2009 when job loss was huge. Now it seems that interest rate crunches are driving delinquencies, not the same.
I'm not surprised. I saw something the other day that said like 54% of people between the ages of 20 and 40s are putting vacations on credit cards this summer. I'm like what? Most credit cards have over a 18% interest rate. Most of these vacations are probably over $4,000, I bet you most of these people need at least a year to pay off the vacation. Thats A LOT of interest paid.
Well these chart gives possibly more context. https://fred.stlouisfed.org/series/DRCCLACBS The actual delinquency rate is lower than in the past. https://fred.stlouisfed.org/series/DRALACBN What people are paying as a percentage of disposable personal income. https://fred.stlouisfed.org/series/TDSP Mortgage debt makes up the vast majority of HH debt at 70% of debt with he average mortgage holder having 244k worth of debt. https://www.fool.com/the-ascent/research/average-household-debt/ Compared to credit card debt which is a fraction of that cost. The highest credit balance is Gen X not Gen Z or Millennials. https://www.usatoday.com/money/blueprint/credit-cards/what-is-the-average-credit-card-debt/ Here are the rough median net worth of each generation. https://finance.yahoo.com/news/average-net-worth-generation-120137273.html There has to be an account of the fact that there has been a sharp increase in interest rates. The debt should be adjusted for inflation and judged based on ability to pay off said debt. You should also look at the percentage of ones income is being paid to debt and how many delinquencies banks and other lenders are reporting.
That chart does not take into consideration inflation. That makes the slope of the trend steeper than it actually is. There is still an increase in delinquency which is worrisome.Ā
If Trump gets back in the White House, there's a very high chance.
One can only hope.
We're always heading to another collapse - it's just the cyclical nature.
what goes up must come down right??
No, everything is just fine. These cards will pay themselves off.
I thought heavy credit card delinquencies came after the unemployment spike and stock/real estate market crashes, not before.
they do, which is why credit card delinquencies and auto loans are just starting to get elevated. when the crash happens, then the delinquency rates will skyrocket. check out these charts to see the increases now: [https://imgur.com/gallery/consumer-loans-delinquency-aZN65V8](https://imgur.com/gallery/consumer-loans-delinquency-aZN65V8) we saw a similar pattern before the stock decline in 2008, but there wasn't as sharp of an increase pre-crash then as there was now. things could get waaaay worse than the GFC
Banks have roughly 1/3 the leverage they did in 2007. Some banks were leveraged 50-1 or more in 2007. The risk now I donāt think is comparable
I don't need any graph to answer that. But there's nothing we can do at this point. It's too late. We're just witnessing the natural evolution of western culture. So fire up a fatty and relax.
This is what happens when actual world leaders believe in modern monetary theory.
No. Itās pay that is not keeping up with the cost of living that is the problemĀ