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Total US credit card debt having just hit a record $1.1 trillion, up $363B since 2021. That's $7.3B a month. Buy Now, Pay Later schemes, projected at $117B this year, aren’t even counted. (fred.stlouisfed.org)
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[-] came_apart_at_Kmart@hexbear.net 41 points 4 days ago

it legit fucks me up when people light up about "but now pay later" schemes.

like it's one thing if it's some mission critical expense, like your furnace shit the bed or whatever and youre one of the 99% of Americans who don't have like $9K on hand.

but I know people who legit buy rich people toys like that, or weirder still, people who could cut that check but instead get on a payment plan because $200/month for x years sounds cheap compared to parting with that much cash now.

also, nobody seems to ever read the terms on those 0% financing deals where if it's not completely paid off by the end of the initial term, you get retroactive interest on the full, original amount borrowed at some insane credit card type of rate.

[-] tricerotops@hexbear.net 28 points 4 days ago

wow i didnt know thats how the 0% financing works. holy shit. that should be illegal.

[-] came_apart_at_Kmart@hexbear.net 26 points 4 days ago

it isn't always like that, but I'll be damned if every one doesn't have that kind of bomb baked into it.

we should all be very wary of the people and places offering 0% interest when banks want 5%.

[-] Cat_Daddy@hexbear.net 11 points 4 days ago

This is the key. Nobody gives money away. They government doesn't even give money away. Hell, the government doesn't even give money to itself.

[-] MizuTama@hexbear.net 6 points 4 days ago* (last edited 4 days ago)

I have a card that has a built in pay later option with two modes:

  1. Have a financing option that's split evenly and you have to pay it back each month to avoid it being treated as a missed payment and having interest applied.

  2. A special option that has no monthly payments at 0% apr, but must be payed in full by the end of the deferred period or missed payment + interest and they apr retroactively jumps to something absurd

The statement tells you if you have something registered under the latter (I have used that option) but doesn't list the date it is due by from what I've seen.

I do use the latter pretty often, mainly because it's bailed me out once or twice when my family has had an emergency and I had to help throw money at a problem til it went away and I avoided interest in the interim, but generally I pay it back immediately since seeing the number stresses me out.

It's basically setup for exploiting those that either aren't financially literate or banks on someone that is trying to play the system for its benefits hitting a rough patch right around when a payment is due then eating their lunch money.

Edit: Also wanted to say the only reason I'm even willing to play the stupid game is because I had a weird finance obsession in my late teens and have a really good credit score as a result which acts as a secondary backup. I was able to bail out my bail out using that the one time I was in a really solid spot with a 2 year 20ish point drop by adding a new card and abusing its promo apr stuff. I have a family member that has low credit due to an incident from a while back and basically all of these options for recovery are closed off to them. Not only that, but learning it also requires a decent amount of time and research, assuming you already have some of the underlying knowledge to do so effectively.

[-] came_apart_at_Kmart@hexbear.net 7 points 3 days ago* (last edited 3 days ago)

for sure. I was in a jam as a young adult once and got into some trouble with CC debt. not astronomical, but managed to run up about $6k worth of debt while unemployed. took me a lot longer to dig myself out than it did to get myself in, of course, and it was an instructive experience on how belt tightening is as much a critically useful skill as understanding the sort of retail financial products offered to regular people and how to decide to use which ones for what purpose.

maybe 10 years later I was in dire circumstances again, but the hole i dug was far more manageable, and I used a combination of student loans debt + a debt balance transfer mediated through a credit union to pop out rapidly, only converting a small fraction of it (at high interest) to a much lower interest subsidized loan.

credit is the primary tool capitalists use to grow their wealth, but it requires a significant investment of time and energy to understand how and when to wield it so it helps you, because the general / default form of retail credit being promoted to us is full of traps.

having that tactical experience/understanding and the strategic understanding of Graeber's book on debt changed my self understanding of debt pretty significantly. because rejecting the taking on any and all forms of debt is understandable, but is also disempowering when stuck operating in this capitalist hellacape.

[-] Wakmrow@hexbear.net 5 points 3 days ago

Financing even if you have cash makes sense if the interest rate is low enough. There's also the fact that cash is liquid and your asset may not be, should an emergency happen it would be better to have a payment plan and enough cash to cover your emergency. Obviously people can still make poor decisions though.

[-] OldSoulHippie@hexbear.net 1 points 3 days ago

This.

I would never be able to afford music gear if it wasn't for buy now, pay later. Paypal (I know, I know) has a pay in four option that is free. It's improved my hobbies using this. I'm sure it's still easy to get in trouble though if you overextend yourself.

[-] sodium_nitride@hexbear.net 31 points 4 days ago

The graph is not adjusted for inflation, so the situation is not as bad as it seems at first glance. From may 2021 to 2025, we went from roughly $740 billion to $1.1 trillion in credit card debt. That's about 49% increase.

According to official CPI data, the CPI increased almost 20% during the same period.

So in reality we have credit card debt growth of about 24%, based on official figures in 4 years. That's a real growth rate of about 5.5% per year.

In my opinion, this is a very good sign that inflation is much higher than officially reported. Credit card debt has no real reason to explode like this if people's regular purchases were not getting substantially more expensive.

[-] PKMKII@hexbear.net 16 points 4 days ago

It’s time to go biblical on the credit card industry.

[-] durings@hexbear.net 13 points 3 days ago

i was just wondering the other day, how many people i've come across who keep up appearances of a certain lifestyle or able to afford certain amounts of rent are actually in crippling debt, because it's something i never even considered until last year. i've never opened a credit card or taken out a loan and so have lived a very basic low income life yet i'd always see people my age or even younger living life with many more amenities with a part time job or even no job... i'm sure trust fund/parental contribution also plays a role

i wonder if the anxiety of having no money is greater or less than the anxiety of being in debt, but certainly from outward appearance those with decent living situations/freedom of choice in what they eat, where they go, how they spend their time, in exchange for being in debt, generally seem to be much happier

[-] sewer_rat_420@hexbear.net 8 points 3 days ago

Being in credit card debt, and probably going deeper in it if I don't get a job soon, the anxiety of the credit card debt limit being hit in the future is the greatest fear

[-] OldSoulHippie@hexbear.net 2 points 3 days ago

One thing that I've learned is to use balance transfers. It costs a little up front, but it's cheaper than paying the interest and you can dig yourself out faster

[-] sewer_rat_420@hexbear.net 3 points 3 days ago

Yeah I'm actually thinking of going this now. I have been sitting on a "pre selected offer" for 21 month 0℅ APR on balance transfers. The fee costs about 2 months of the interest I'm currently paying.

We sort of fucked up and haven't been living very frugally while my income has been variable and no guaranteed due to it being part time contract based. Our rent eats up 2/3 of my partners after tax pay. Right now we are really cutting out the unnecessary stuff to limit how much worse the debt can get. Unfortunately I will have to put this months rent or at least a portion of it on credit.

If I can actually get a full time job, hopefully we can maintain frugality and pay it off quick, maybe consolidate it using some debt agency.

If I can't get a job soon, or if my partner loses her job, we will need to move back in with parents. I'm beyond lucky that we have that option with both sets of parents, but it would still suck

[-] OldSoulHippie@hexbear.net 2 points 3 days ago* (last edited 3 days ago)

Good luck! Hope it works out for you! My wife and I went a little nuts with credit when we first really moved in together. We didn't have any furniture and we definitely bought some concert tickets on credit we shouldn't have. Long story short, with having to put actual small emergencies on credit (sick cat/car trouble) it took us about six years to dig out from under it. Probably four of those years were us paying the interest rate on the first credit card until she got a really good credit score and we started doing the balance transfer every year and a half. Granted, we were "only" in about $9,000 debt total, but the extra money we were able to throw at it from saving money on the interest made it go away so much faster.

Never gonna make that mistake again. Hopefully it never becomes a necessity. We live very frugally most of the time and splurge once or twice a year on a trip or a concert. Other than that, it's rice and beans and hanging out at home most of the time.

[-] invalidusernamelol@hexbear.net 7 points 3 days ago* (last edited 3 days ago)

The anxiety of being in debt sucks because it's an obligation.

If you don't have money, you can get more money. If you're in $15k of credit debt at 25%, that's an additional $300/month just to have the debt.

Then it follows you and makes it harder to do anything. A 300 credit score is basically a death sentence. No one will rent you you, no one will approve you more loans, and anything you do get will be even more predatory.

[-] durings@hexbear.net 6 points 3 days ago

that's generally the same logic that has led me to avoid getting a cc or loans, probably better to be at 0 with room to go up than in the negative constantly. but your credit score point; i have no credit score at all and so people still won't rent to me shrug-outta-hecks

[-] invalidusernamelol@hexbear.net 2 points 3 days ago

No score is kinda a default ~600 I think. You can massage it by just getting a couple $500 starter cards and using them for a purchase then immediately paying them off and never touching them again (just so you have some credit and no utilization).

I think your debit accounts also count towards "average account age" too.

It's all a game, and if you play a bit, you can kinda make it work. If you play too much they take evening, and if you don't play at all, they won't give you anything...

[-] OldSoulHippie@hexbear.net 4 points 3 days ago* (last edited 3 days ago)

As someone who finally got their credit score to something respectable, they count debt to income, open line of credit and how much you use (stay under 1/3rd), age of credit, number of times you swipe the card in a given month, and probably a few other weird things. Another thing they teach in school, but not the whole truth is that bad things leave your credit report after seven years. That's only true if you resolve it, and even then, it's seven years from the payoff letter, not seven years from start of credit. If you ignore the collections agency, they just kick your debt around to "different agencies" that open a new case, which restarts the clock.

Even if you keep your proverbial nose clean they still are unlikely to let you into the club. I bought my car when I had a mid 600s score and got like a 13% interest rate for six years. I now have a 750ish score and I tried to refinance and the one I tried with came back to me with a 20+% interest rate and like 84 months. But good news! My payment was going to go down like $40! I cussed the person out, told them to get a job that doesn't prey on people and hung up on him.

This comment isn't meant specifically for you, just sharing things I've learned to anyone reading

[-] CommCat@hexbear.net 5 points 3 days ago

Americans are the biggest consumers in the world, they consume way more than they need. The Trump Tariff Wars have shown us one thing, Americans think it's their god given right to consume and consume. . I'm sure there are few desperate people who use credit cards to survive, but most of these Americans who are in credit card debt is because they can't stop buying stuff they don't really need.

[-] Imnecomrade@hexbear.net 3 points 3 days ago* (last edited 3 days ago)

I use credit cards to take advantage of banks by getting free cashback money while I pay them off each month so I don't get interest. I don't get a lot of stuff I don't need; I use the credit cards to help me save money for all of my regular purchases like groceries or gas. If it ever gets to the point I can't pay for the card by the end of the month, I'm cutting it up. I earn around $10-30 back each month.

[-] RION@hexbear.net 5 points 3 days ago

There's been a lot of nerfs to credit card rewards in 2025, I wonder how this interacts with that

this post was submitted on 30 Jul 2025
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