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Comment by mupuff1234 | Hacker News Reader

Who are these "fast spending Americans" and what exactly are they spending more on?

Affirm, Klarna, and other services for deferred payment are just credit card debt in a different form. They’re used to encourage impulse buys like expensive event tickets.

Seriously go to an expensive event like the Cowboys v 49ers game or Taylor Swift concert and look around. It’s not a bunch of millionaires pow wowing around.

Credit card debt is at a high, for one.

https://www.wate.com/investigations/retail-credit-cards-apr-...

"A recent Bankrate survey found that 47% of credit cardholders carry a balance month to month. 60% of those carrying card balances have been in credit card debt for at least a year."

This sounds pretty scary. But I also wonder what they mean by retail credit cards. Does that include retailers who offer 24 months interest free on a big purchase when opening the card?

Probably. I think a year of interest free payments is smart, but not if you have several maxed out cards, and high overall debt to income ratio.

Debt to income would probably be a better metric?

> * Does that include retailers who offer 24 months interest free on a big purchase when opening the card?*

Yes, it would because that's an ongoing/carried balance.

And you're right.. a better analysis would be: how many people continue carrying a balance after their introductory rate goes away?

Because retail credit cards have the highest rates by far:

> The average retail credit card annual percentage rate (APR) hit a new record high of 28.93% this year, up from 26.72% in 2022 and 24.35% in 2021, according to Bankrate’s annual Retail Cards Study out Monday. 28.93% APR is well above the national average, which clocks in at 20.71%

Ref: https://www.foxbusiness.com/economy/retail-credit-card-rates...

Don't forget about the most insidious aspect of these retail cards. Once that promotional no-interest period expires, your balance gets hit with all the accrued interest from the promotional period.

So, anyone thinking of taking advantage of these promotions take heed: Pay off the entire balance before the promotion expires!

This makes that debt really hard to measure. These debt bombs that retroactively make you have carried a balance for years in the past.

Don't include them: you're missing all the people who transform into high debt carriers.

Include them: you sweep in all the people who set an automatic payment to pay it off with a couple months to spare and forget about it.

To further complicate things, the entire "Buy Now, Pay Later" industry does NOT report to credit agencies, etc until someone is late on payments (not sure how many days late).

Therefore, there's an entire pile of debt that also is invisible to these metrics.

There are also a lot of headlines about the average car payment being at a record high, well over $700 per month:

https://money.com/average-car-payment-record-high/

Would love to see a chart of average car payments to income ratio.

That’s depressing, particularly given the recent trend of car loans having longer and longer terms, disposing with the conventional wisdom of no greater than three years.

Credit card debt as a % of disposable income is similar to pre-covid https://fred.stlouisfed.org/graph/?g=1aFmn

Most of the "consumer debt reaches all time high" events are explained by a larger economy and inflation making the numbers bigger than 2019.

Probably all Americans to some degree, and sure they're spending more but with rampant inflation, they're definitely not buying more.

That number is already adjusted for inflation.

My net worth went up like 20% this month with Bitcoin Cash. Maybe there are a lot like me?

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