Now do total debt: government + corporate + household
Then add unfunded liabilities like pension benefits and healthcare promises for every federal, state and local government, school district and corporation.
A trillion of credit card debt is something like one half of one percent of total indebtedness.
There have been a couple of episodes of Simpsons where “credit card debt” was the subplot. Should give a good idea how “relatable” the experience it was even in the older days. Obviously I’m exaggerating, but you get the idea.
I can understand how someone right on the edge of disaster (and Homer was always on the edge) would get into debt, but those numbers would imply 2/3 of people are in what I would consider imminent financial collapse. Surely people couldn't exist in that state for lengthy periods of time. Right?
I mean does it necessarily imply that? You could pay just the minimum payment for a very long time with no consequences, I think. The main problem is you’d hit the credit limit and would have super high interest payments. But even then the minimum payment may be viable.
But yeah, reality is that most people are not white collar workers with decent income. HN is probably one of the higher income forums on the internet just because of tech. Definitely a bubble here
> those numbers would imply 2/3 of people are in what I would consider imminent financial collapse.
A suspect a lot of people also carry ongoing credit card debt because they're bad at math or just don't care, not all of them necessarily anywhere near financial collapse.
I have a friend who early in their career kept credit card debt for years, because he just liked to pay the minimum. As much as I tried to explain how dumb that was, it didn't help. Still, he was a software engineer making tons of money so nowhere near financial trouble, just financially dumb.
But of course there are also lots of people who truly are in credit card debt and can't afford to pay anything but the minimum.
There are people who most of the time only put stuff on the card that they can afford to pay off that month, but occasionally put something big on to pay off over time. They don't put anything else big on the card until they have brought that balance to near zero.
They are in the carrying a balance group but aren't necessarily in any financial trouble.
From talking to lots of working class friends, meaning, not white collar, yes - they are in a constant state of financial collapse.
I think people do not truly gauge just how poorly adjusted wages are and just how expensive everything is. A fast food meal is now anywhere from 15-20 dollars. That's about an hour of labor for many, many people.
To put into perspective, where I live a one-bedroom is gonna run you 1200 dollars a month minimum. And that's gonna be a sketchy one bedroom. At a wage of 20 dollars an hour and 35 hours a week, that's about 2800 dollars a month. So you can't afford a one bedroom, period. Bearing in mind, healthcare alone will eat a couple to a few hundred dollars a month. Food, another few hundred at least.
You can optimize, of course. Rent a house with three other people, eat only cheap cooked foods like beans, drive a beater. But it's gonna be a fierce financial struggle always. You get sick, you need surgery, your deductible is 7 grand - you're fucked. Fucked completely, and that's not counting the lost wages. Or the 300 dollars a month you've burned on a healthcare premium for years. These people have no savings, and certainly no investments.
And, to top this all off: 20 dollars an hour is a good wage in my state. 15 is not uncommon at all. If you're wondering why or how people work 2-3 jobs, this is how.
I don't get how people come up with the idea of paying interests on a credit card. The interests are extortion level, 20%? Wtf? A personal line of credit is like 8%
while true the connotation of the title would imply meaningful debt. And people who simply use cards for convenience and never hold a past due balance isn't really meaningful debt.
It's almost like counting the "debt" between ringing up your items at wal-mart and paying. For those 30 seconds you owe money.
Based on some quick stats you could totally turn that into a useless headline "Americans accrued 4.1 billion dollars of debt every 30 seconds in 2025"
> Not just technically. They literally have credit card debt in every sense of the word.
I mean technically yes that is absolutely correct. But we all know it's not what people think of as "debt", so as previous poster said, those should really be tracked separately. It is silly to consider the float between purchase time to payment time to be debt of the same type as debt carried over month to month.
For one thing, debt basically always (temporary offers aside) pays interest. The float between purchase to payment pays no interest.
But technicalities aside, the stats on credit card household debt would be much more revealing if they separated these numbers. They even indicate opposite things:
If the temporary float balances are going up, that suggests consumers are spending more and comfortably paying it, so the economy is doing well.
Whereas if the accruing monthly debt balances are going up, that's a sign the consumer is in trouble so the economy is probably doing badly.
I'm still surprised they don't track it separately. According to my credit report I have what appears to be a running balance of 5 or 6 grand. I suspect a machine learning algorithm could watch the way the balance bounces around and accurately guess that I pay it off each month, but there's no distinction on the credit report at least. In my mind a balance where you only pay off a chunk each month is different entirely from one where you always pay the entire amount. And I'd put a third category in there, too, credit card debt for which you are only making the minimum payment. This all seems like valuable data when assessing creditworthiness.
> This is basically equivalent from a credit risk perspective, the banks don’t really care what % is interest vs. principal.
That seems counterintuitive. Someone carrying a growing balance at $5K making the minimum payment is obviously not the same kind of risk as someone who spends $5K/month on their credit card and then pays it off.
So the metric GP is after is credit used per credit user? Normalizing the effect of an increase in credit users, and not assuming it's uniformly distributed.
Seems simpler to just publish the delinquent debt separately.
The credit bureaus take this into account: 30+ day delinquency is reported and will plummet your score. Not paying debt is worse than just having debt. But even having a high debt ratio means you're at-risk of not paying, so that lowers your score.
Utilization is really a proxy: the assumption is that your credit limit is adjusted to your income. If you're at 50% utilization, even if you pay off on time every time, that indicates, to them, you have a high debt to income ratio. So, if you get into financial hardship, you're more likely to not be able to pay.
The wrinkle is that credit limit is not really adjusted to income. You need to manage it yourself, and request limit raises when your income increases. You also need to have enough lines of credit to boost your limits. People think opening credit cards hurts your score, and it can, but often doesn't as your utilization goes down.
Of course this all assumes you're responsible. If you're not, then opening more credit cards is always a mistake. If you're really irresponsible, then skip credit cards altogether.
But that only kicks in when someone misses a payment. Someone who can only make the minimum (typically 1% in my experience) is at much higher risk of getting to that missed payment stage. Wouldn't you want to reflect that risk before they finally reach a more dramatic demonstration of over-extension?
If you’re only making a minimum payment consistently lower than your monthly spend + interest, your utilization will go up very quickly and you’ll look like a credit risk. This pattern is also not sustainable for the consumer; eventually they’ll hit their credit limit.
On the other hand, if you’re consistently maxing out your credit cards, you also look like a credit risk even if to date you’ve paid every month in full and on time. The bank sets credit limits based on what they see as a safe maximum given your credit history & income, so riding what’s supposed to be a maximum is worrisome.
The difference is that the bank will let you keep doing the latter indefinitely, they just won’t be as like to grant you any new credit.
As for why banks don’t want to flag low-utilization, minimum-payment accounts earlier, I assume they’re just not a serious problem: Truly marginal users eventually default and get their cards deactivated at little cost to the bank, others who use the cards only on “special occasions” and pay out over time at unfortunate levels of interest make them money.
Since wages have not kept up with inflation, it’s already factored in as inflation drives the total debt faster. Total debt rising without a corresponding rise in wages means an increase in interest and defaults in general.
A total measured over the entire US economy without adjusting for a variety of factors including inflation and population change seems like exactly the kind of thing you would expect from a news headline. How about average or per capita?
The good news from doing the analysis properly is that this situation has been improving recently. (You will find this a lot when people panic about statistics.)
People who cannot afford to survive without this credit and need it to fill the wage expense gap for basic living needs.
This is why the unemployment rate is a poor metric. It doesn’t matter much if you have a job if its wages are insufficient for one to meet their basic needs on. Lots of employed folks, but folks barely treading water economically.
A silver lining is that with immigration constrained for the foreseeable future, wages will be pushed up over time through structural demographics further tightening labor supply.
I've been down to single-digit dollars, in situations where I was forced to choose between food or gas. I also had "never ever have any credit card debt" drilled into me from a young age, and as a result didn't even have a credit card at the time to make sure the temptation to use it wasn't an option.
I ate a lot of ramen, rice, or sometimes nothing, but eventually made it through. If I had racked up a bunch of debt I would have been poor much longer, though it might have been healthier for me.
I keep a card around like this. I use it once a year so they don't close it for inactivity, but it's a non-reward card so I don't use it day to day. It has a 8.50% APR from two decades ago, so I keep it around just in case. I can't really see where I'd actually need it, but it costs me nothing to keep it around.
Many years ago this "0% transfer" stuff was relatively new in the UK and a new outfit wanted to break into the market, they had two ideas which I guess they had costed as marketing ploys. First, the cards were a weird shape, this means there are a few applications where your card doesn't work, which is slightly annoying, but it's balanced by the brand recognition. Nobody cares which brand of rectangular plastic card you... oh, that's a weird shape.
But the Second was the easiest possible 0% transfer. To effect the transfer they write you a cheque for however much they'd agreed (let's say £1000) and you use that cheque to pay off a card or other line of credit. They charge 0% on this for 12 months.
What I, and lots of poor but money-savvy people did was sign up for the card. Deposit the cheque in an interet-bearing savings account, and set an alarm to pay the card off before that 0% expired.
So twelve months later you've made say £30 interest and you cut the card up. I don't know how many people did this, versus how many engaged with their product as they'd imagined. I know only two things:
1. I had about 50p outstanding balance to pay on my 12 month card, I figured they'd tell me I need to pay 50p within 30 days or whatever and if not they'd charge me extra - nope, they wrote saying "Your balance is negligible, we write off this tiny balance and don't expect to ever hear from you again".
2. This offer was never repeated. They did other 0% transfer offers but the "It's just a cheque" idea was never attempted again.
There was a period during the late 2000s when credit card companies were offering 0% interest on balance transfers with no balance transfer fees, AND bonuses based on minimum card spend over a certain period after account opening. FatWallet (RIP) was full of people talking about how to use these offers to make loads of money in combination with rebates, eBay, bank account deposit bonus offers, and a lot more. Wild times. Long since over though.
for example, the last time we saw a nice little rise was in 2008 where nothing bad happened and everything was okay (look at the 90+ day delinquency rates). at least housing and mortgages are fine for now but if there was ever an actual recession indicator, this may be it
I think you're putting the cart before the horse: the rise looks to have been constant, punctuated by then leveling off and falling, of which we currently see only the barest hint
we're looking at the 90+ day default line chart? 2008 saw an increase from sub 8% (which seems to be the norm) to 13%. 2023 was at 7% and we're right now sitting at 13% again. there are no other significant swings in credit card debt
Okay, I see what you're saying. Since the web can't be bothered to make links work anymore, the link just takes you to the first chart (total debt) rather than the third one (delinquencies)
yep, and depending on what meaning you want to derive population matters too. also kinda like all kinds of movies have been breaking sales "Records" but if you look at the inflation adjusted top ten, #1 is still "Gone With the Wind".
I'm saying bond prices would drop sharply if China tried to rapidly sell even 10% of its holdings.
When bond prices drop, US interest rates go up, which hurts the real US economy.
And when bond prices drop, that devalues the remaining 90% of China's holdings, hurting China too.
The Fed could stabilize the bond market by printing dollars to buy the bonds itself, but that would devalue the dollar and drive up inflation in the US. When China tries to repatriate that wealth, they must sell dollars and buy yuan, which would drive up the value of the yuan, driving up the cost of Chinese exports, hurting their manufacturing sector.
it doesn't sound like it from what you said. China appears to have the option to destroy the US economy by forfeiting much of the value of the US dollars they have, they don't have to buy yuan with it.
Both economies would suffer massive shockwaves, but the US has central bank tools to absorb the blow, while China destroys its own asset base with no way to recover the loss. They're not going to burn down their own house just to smoke out their neighbor.
Just Googling here: 10% of China's holdings would be $66B. Daily trading volume for US Treasuries is $1.2T.
The most the Fed has ever held on its balance sheet is $5.8T.
Maybe I missed a zero somewhere but China's sale of 10% of their holdings seems in isolation like an awfully manageable problem. A different discussion if there were a ton of other crazy stuff going on in the world economy and they just piled on, perhaps.
As someone who's very well informed on that corner of financial markets.. you're absolutely right. 66bn might cause some minor moves in yields but it's far from a disaster.
US 10y bond auctions are often >40bn in size, with shorter maturities well over that. The seller of this debt (China) wouldn't want to smash the market because they'd only be shooting themselves in the foot.
Point being that it's an easily digestible amount of debt.
As someone who's very well informed on that corner of financial markets, you probably realize that China controls much more than $660 billion of US Treasury securities.
I'm sure you also realize that when a large holder sells a significant stake of any asset, traders anticipate they will sell more in the future.
Example 1: Berkshire Hathaway selling $47 million of BYD and the market price dropping 8% the next day, wiping out $10 billion of market value.
Example 2: Musk selling 0.6% of his stake in Tesla, and the market price dropping 15% the next day, wiping out $187 billion in market value.
Example 3: UK government announcing a planned sale of 0.3% of above-ground gold, and the global gold price plunging 10% before the first auction.
> As someone who's very well informed on that corner of financial markets, you probably realize that China controls much more than $660 billion of US Treasury securities.
How much do they control? Please cite your sources.
I can find some information about "shadow holdings" (exciting!) held in Luxembourg and Belgium [0] but I cannot imagine those treasuries would add up to a multiple of what's officially on the books and held by the Chinese government and Chinese companies. Interesting thought, though.
I once thought that this would be true, but wars are fought with oil burning machinery. And so countries with oil will always be able to play bully. A country with strong access to oil also has the most important resource in war. Batteries are simply less dense energy storage.
> US monopoly money has value mainly because of petro dollar.
A currency’s value reflects confidence in the economy issuing it. The dollar is backed implicitly by the size, productivity, and stability of the US economy.
No, the currency has value only in as so far as you can buy stuff you need with it.
Lets say you're Germany, US imports make up only 6.9% of total import value(Netherlands is 7.1% and China 12.5% on top) closely followed by Poland with 5.9%.
Take most countries in Europe, US imports are a rather small very modest portion.
So it doesn't make that much sense that US dollar would be particularly valuable.
After all - you really don't actually even buy that much stuff from US, thus the need for the US dollar isn't particularly large, and why would it be?
On the other hand, if you want to buy oil however, you need the dollar.
That is what makes the dollar valuable.
Now if you can buy oil from Iran, Russia or whatever in some other currencies, why would you need the stinking dollar?
I mean, you do import some US goods, but not that much really.
Why would you have confidence in an economy that regularly has insane trade deficit (1 trillion now)?
Once the petrodollar goes, thing will go tits up. And it will, because there's only 60years of oil left in the global oil reserves in the tank.
China doesn't hold all that much debt, so this doesn't apply
But anyway, a large debt holder can bind up the borrower by announcing they think the debt they hold is worthless. The impact would depend on how much debt it was, with a large amount being dumped almost certainly increasing the cost of borrowing.
If I go to a bank, and I get a loan, then the terms of that loan allow the bank to do that.
If I sell a bond, then I set the terms, and I say that you can’t do that. You buy the bond understanding the terms.
China owns treasury bonds, they don’t have the ability to “bind up the borrower”. They can sell their bonds at market prices, but they can’t say “this debt is worthless, pay us now”. That’s not how bonds work.
That's isn't what I am arguing. I'm arguing that a very large holder of bonds can potentially set the market price. If they move the market for the older bonds, they will move the market for new issues.
Now do total debt: government + corporate + household
Then add unfunded liabilities like pension benefits and healthcare promises for every federal, state and local government, school district and corporation.
A trillion of credit card debt is something like one half of one percent of total indebtedness.
>A trillion of credit card debt is something like one half of one percent of total indebtedness.
exactly. it is just $4K/person. Whereis current US national debt is $120K/person.
The US doesn't default on his interest payments. The US consumer on the other hand....
The US has defaulted on its interest payments several times.
Regardless, this article is about one of those nearing record levels.
But beware the trap: total debt = total savings
Does a balance that has not accrued interest count as debt for this measurement? I.e. people who always pay the statement.
The $1.26 trillion Federal Reserve figure includes both balances paid in full every month and balances accruing interest.
Convenience spending by "transactors" (roughly 35% of cardholders) who pay in full every month is something like $200 billion of this.
Do you have a citation for the 35% number? I wouldn't have thought it was that rare.
Let me Google that for you ...
Ah, here it is https://bpi.com/missing-factors-in-the-cfpbs-analysis-of-ris...
I'm surprised it's that high. While times have changed, the whole idea of the credit card was to purchase a thing you could not otherwise afford to.
I'm shocked how small that part of the pie is. That's concerning.
There have been a couple of episodes of Simpsons where “credit card debt” was the subplot. Should give a good idea how “relatable” the experience it was even in the older days. Obviously I’m exaggerating, but you get the idea.
I can understand how someone right on the edge of disaster (and Homer was always on the edge) would get into debt, but those numbers would imply 2/3 of people are in what I would consider imminent financial collapse. Surely people couldn't exist in that state for lengthy periods of time. Right?
They could, and do.
If I remember the stats correctly, I believe in the US the lowest 50% of households combined have maybe 2% of the wealth
Sounds about right.
I mean does it necessarily imply that? You could pay just the minimum payment for a very long time with no consequences, I think. The main problem is you’d hit the credit limit and would have super high interest payments. But even then the minimum payment may be viable.
But yeah, reality is that most people are not white collar workers with decent income. HN is probably one of the higher income forums on the internet just because of tech. Definitely a bubble here
> those numbers would imply 2/3 of people are in what I would consider imminent financial collapse.
A suspect a lot of people also carry ongoing credit card debt because they're bad at math or just don't care, not all of them necessarily anywhere near financial collapse.
I have a friend who early in their career kept credit card debt for years, because he just liked to pay the minimum. As much as I tried to explain how dumb that was, it didn't help. Still, he was a software engineer making tons of money so nowhere near financial trouble, just financially dumb.
But of course there are also lots of people who truly are in credit card debt and can't afford to pay anything but the minimum.
There are people who most of the time only put stuff on the card that they can afford to pay off that month, but occasionally put something big on to pay off over time. They don't put anything else big on the card until they have brought that balance to near zero.
They are in the carrying a balance group but aren't necessarily in any financial trouble.
From talking to lots of working class friends, meaning, not white collar, yes - they are in a constant state of financial collapse.
I think people do not truly gauge just how poorly adjusted wages are and just how expensive everything is. A fast food meal is now anywhere from 15-20 dollars. That's about an hour of labor for many, many people.
To put into perspective, where I live a one-bedroom is gonna run you 1200 dollars a month minimum. And that's gonna be a sketchy one bedroom. At a wage of 20 dollars an hour and 35 hours a week, that's about 2800 dollars a month. So you can't afford a one bedroom, period. Bearing in mind, healthcare alone will eat a couple to a few hundred dollars a month. Food, another few hundred at least.
You can optimize, of course. Rent a house with three other people, eat only cheap cooked foods like beans, drive a beater. But it's gonna be a fierce financial struggle always. You get sick, you need surgery, your deductible is 7 grand - you're fucked. Fucked completely, and that's not counting the lost wages. Or the 300 dollars a month you've burned on a healthcare premium for years. These people have no savings, and certainly no investments.
And, to top this all off: 20 dollars an hour is a good wage in my state. 15 is not uncommon at all. If you're wondering why or how people work 2-3 jobs, this is how.
I don't get how people come up with the idea of paying interests on a credit card. The interests are extortion level, 20%? Wtf? A personal line of credit is like 8%
Technically, people who always pay the statement do have credit card debt until they pay, it's just free debt.
Not just technically. They literally have credit card debt in every sense of the word.
while true the connotation of the title would imply meaningful debt. And people who simply use cards for convenience and never hold a past due balance isn't really meaningful debt.
It's almost like counting the "debt" between ringing up your items at wal-mart and paying. For those 30 seconds you owe money.
Based on some quick stats you could totally turn that into a useless headline "Americans accrued 4.1 billion dollars of debt every 30 seconds in 2025"
> Not just technically. They literally have credit card debt in every sense of the word.
I mean technically yes that is absolutely correct. But we all know it's not what people think of as "debt", so as previous poster said, those should really be tracked separately. It is silly to consider the float between purchase time to payment time to be debt of the same type as debt carried over month to month.
For one thing, debt basically always (temporary offers aside) pays interest. The float between purchase to payment pays no interest.
But technicalities aside, the stats on credit card household debt would be much more revealing if they separated these numbers. They even indicate opposite things:
If the temporary float balances are going up, that suggests consumers are spending more and comfortably paying it, so the economy is doing well.
Whereas if the accruing monthly debt balances are going up, that's a sign the consumer is in trouble so the economy is probably doing badly.
Not every sense - in the colloquial sense, people don't count that as being "in debt".
I'm still surprised they don't track it separately. According to my credit report I have what appears to be a running balance of 5 or 6 grand. I suspect a machine learning algorithm could watch the way the balance bounces around and accurately guess that I pay it off each month, but there's no distinction on the credit report at least. In my mind a balance where you only pay off a chunk each month is different entirely from one where you always pay the entire amount. And I'd put a third category in there, too, credit card debt for which you are only making the minimum payment. This all seems like valuable data when assessing creditworthiness.
The credit bureaus score based on the % of credit you use (and of course that you pay on time).
This is basically equivalent from a credit risk perspective, the banks don’t really care what % is interest vs. principal.
> This is basically equivalent from a credit risk perspective, the banks don’t really care what % is interest vs. principal.
That seems counterintuitive. Someone carrying a growing balance at $5K making the minimum payment is obviously not the same kind of risk as someone who spends $5K/month on their credit card and then pays it off.
Growing balance = greater % of credit used.
So the metric GP is after is credit used per credit user? Normalizing the effect of an increase in credit users, and not assuming it's uniformly distributed.
Seems simpler to just publish the delinquent debt separately.
Consumer credit % used of credit available.
I mean you might also think the banks are issuing a bunch of dumb credit, but that suggests a problem with their financial state, not consumers.
The credit bureaus take this into account: 30+ day delinquency is reported and will plummet your score. Not paying debt is worse than just having debt. But even having a high debt ratio means you're at-risk of not paying, so that lowers your score.
Utilization is really a proxy: the assumption is that your credit limit is adjusted to your income. If you're at 50% utilization, even if you pay off on time every time, that indicates, to them, you have a high debt to income ratio. So, if you get into financial hardship, you're more likely to not be able to pay.
The wrinkle is that credit limit is not really adjusted to income. You need to manage it yourself, and request limit raises when your income increases. You also need to have enough lines of credit to boost your limits. People think opening credit cards hurts your score, and it can, but often doesn't as your utilization goes down.
Of course this all assumes you're responsible. If you're not, then opening more credit cards is always a mistake. If you're really irresponsible, then skip credit cards altogether.
> 30+ day delinquency is reported
But that only kicks in when someone misses a payment. Someone who can only make the minimum (typically 1% in my experience) is at much higher risk of getting to that missed payment stage. Wouldn't you want to reflect that risk before they finally reach a more dramatic demonstration of over-extension?
If you’re only making a minimum payment consistently lower than your monthly spend + interest, your utilization will go up very quickly and you’ll look like a credit risk. This pattern is also not sustainable for the consumer; eventually they’ll hit their credit limit.
On the other hand, if you’re consistently maxing out your credit cards, you also look like a credit risk even if to date you’ve paid every month in full and on time. The bank sets credit limits based on what they see as a safe maximum given your credit history & income, so riding what’s supposed to be a maximum is worrisome.
The difference is that the bank will let you keep doing the latter indefinitely, they just won’t be as like to grant you any new credit.
As for why banks don’t want to flag low-utilization, minimum-payment accounts earlier, I assume they’re just not a serious problem: Truly marginal users eventually default and get their cards deactivated at little cost to the bank, others who use the cards only on “special occasions” and pay out over time at unfortunate levels of interest make them money.
Not adjusted for inflation, so useless. At least do % of gdp which is also flawed but better than this.
Since wages have not kept up with inflation, it’s already factored in as inflation drives the total debt faster. Total debt rising without a corresponding rise in wages means an increase in interest and defaults in general.
A total measured over the entire US economy without adjusting for a variety of factors including inflation and population change seems like exactly the kind of thing you would expect from a news headline. How about average or per capita?
The median wage has kept up with inflation anywhere this line is flat or sloping up: https://fred.stlouisfed.org/series/LES1252881600Q
Yes, that is correct for median wages within a time range.
what?
Basic media numeracy will tell you that because the population is increasing and inflation exists this number is not meaningful.
It sounds like it's describing "the problem with credit card debt is worse than ever" but this number cannot tell you that.
Fortunately, the data does exist and has been analyzed and it's already been put together for you here: https://www.philadelphiafed.org/surveys-and-data/2026-q1-lar...
The good news from doing the analysis properly is that this situation has been improving recently. (You will find this a lot when people panic about statistics.)
The American consumer is an enigma
Who is buying things with near-30% APR loan?
People who cannot afford to survive without this credit and need it to fill the wage expense gap for basic living needs.
This is why the unemployment rate is a poor metric. It doesn’t matter much if you have a job if its wages are insufficient for one to meet their basic needs on. Lots of employed folks, but folks barely treading water economically.
A silver lining is that with immigration constrained for the foreseeable future, wages will be pushed up over time through structural demographics further tightening labor supply.
https://www.marketplace.org/story/2026/08/11/credit-card-del...
https://www.marketplace.org/episode/2026/07/16/workers-are-b...
https://news.ycombinator.com/item?id=49294240 (citations)
https://news.ycombinator.com/item?id=49027462 (citations)
https://news.ycombinator.com/item?id=47680794 (citations)
TLDR Wages must go up, price levels will not come down.
Additional citation:
https://www.marketplace.org/episode/2026/08/07/job-losses-re...
Wow look at Mr. “I’ve-never-been-poor”, bragging about his privilege. What a flex!
Bad take.
I've been down to single-digit dollars, in situations where I was forced to choose between food or gas. I also had "never ever have any credit card debt" drilled into me from a young age, and as a result didn't even have a credit card at the time to make sure the temptation to use it wasn't an option.
I ate a lot of ramen, rice, or sometimes nothing, but eventually made it through. If I had racked up a bunch of debt I would have been poor much longer, though it might have been healthier for me.
You have no idea who I am or what my history is.
And you have no idea about theirs.
I agree the person you are responding to was out of line.
But your question, who is taking a credit line at 30%, you could answer for yourself if you had been in that situation before.
For example, I might answer it with, "A college student who has books to purchase for a class but no funds."
That's what a 0% balance transfer is for right? Just play musical cards until the issuers blacklist you.
It's never 0% though. You pay a transfer fee (e.g. 5%). The 0% promo period is also limited.
The consumer is screwed either way, whether they try to "transfer" balances or not.
I actually have a no-rewards credit union credit card that has no balance transfer fees and the lowest APR I’ve ever seen on a credit card.
It has bailed me out of paying high interest rates and fees during hard times before.
I keep a card around like this. I use it once a year so they don't close it for inactivity, but it's a non-reward card so I don't use it day to day. It has a 8.50% APR from two decades ago, so I keep it around just in case. I can't really see where I'd actually need it, but it costs me nothing to keep it around.
That very much depends.
Many years ago this "0% transfer" stuff was relatively new in the UK and a new outfit wanted to break into the market, they had two ideas which I guess they had costed as marketing ploys. First, the cards were a weird shape, this means there are a few applications where your card doesn't work, which is slightly annoying, but it's balanced by the brand recognition. Nobody cares which brand of rectangular plastic card you... oh, that's a weird shape.
But the Second was the easiest possible 0% transfer. To effect the transfer they write you a cheque for however much they'd agreed (let's say £1000) and you use that cheque to pay off a card or other line of credit. They charge 0% on this for 12 months.
What I, and lots of poor but money-savvy people did was sign up for the card. Deposit the cheque in an interet-bearing savings account, and set an alarm to pay the card off before that 0% expired.
So twelve months later you've made say £30 interest and you cut the card up. I don't know how many people did this, versus how many engaged with their product as they'd imagined. I know only two things:
1. I had about 50p outstanding balance to pay on my 12 month card, I figured they'd tell me I need to pay 50p within 30 days or whatever and if not they'd charge me extra - nope, they wrote saying "Your balance is negligible, we write off this tiny balance and don't expect to ever hear from you again".
2. This offer was never repeated. They did other 0% transfer offers but the "It's just a cheque" idea was never attempted again.
There was a period during the late 2000s when credit card companies were offering 0% interest on balance transfers with no balance transfer fees, AND bonuses based on minimum card spend over a certain period after account opening. FatWallet (RIP) was full of people talking about how to use these offers to make loads of money in combination with rebates, eBay, bank account deposit bonus offers, and a lot more. Wild times. Long since over though.
I use a credit card for purchases because if someone gets ahold of it and goes wild, it's insured and has a limit
If they get ahold of my banking info they could take a lot more than my credit card limit.
The damage they can do with my credit card is way, way less.
...I'm not saying this is good, but doesn't the existence of inflation mean we'll always keep breaking this record?
yes but you can graph trends over time: https://www.newyorkfed.org/microeconomics/hhdc
for example, the last time we saw a nice little rise was in 2008 where nothing bad happened and everything was okay (look at the 90+ day delinquency rates). at least housing and mortgages are fine for now but if there was ever an actual recession indicator, this may be it
I think you're putting the cart before the horse: the rise looks to have been constant, punctuated by then leveling off and falling, of which we currently see only the barest hint
we're looking at the 90+ day default line chart? 2008 saw an increase from sub 8% (which seems to be the norm) to 13%. 2023 was at 7% and we're right now sitting at 13% again. there are no other significant swings in credit card debt
Okay, I see what you're saying. Since the web can't be bothered to make links work anymore, the link just takes you to the first chart (total debt) rather than the third one (delinquencies)
yep, and depending on what meaning you want to derive population matters too. also kinda like all kinds of movies have been breaking sales "Records" but if you look at the inflation adjusted top ten, #1 is still "Gone With the Wind".
"In the final quarter of 2019, U.S. credit card debt reached a record high of $930 billion."
Which equals $1,208.46 billion today
So it is past inflation by $52 million?
What happens to the credit card debt that is owed by people who are hunted down by ICE and kicked out of the country? Is it free money for them?
When China's makes the call on US debt, its going to be very bleak day.
It would be bleak because the US won't pay, and that would crater both the US and China.
That's why China will never do this.
Better for both nations to extend and pretend.
Are you saying the bond market would go without a bid?
I'm saying bond prices would drop sharply if China tried to rapidly sell even 10% of its holdings.
When bond prices drop, US interest rates go up, which hurts the real US economy.
And when bond prices drop, that devalues the remaining 90% of China's holdings, hurting China too.
The Fed could stabilize the bond market by printing dollars to buy the bonds itself, but that would devalue the dollar and drive up inflation in the US. When China tries to repatriate that wealth, they must sell dollars and buy yuan, which would drive up the value of the yuan, driving up the cost of Chinese exports, hurting their manufacturing sector.
It's mutually assured destruction.
it doesn't sound like it from what you said. China appears to have the option to destroy the US economy by forfeiting much of the value of the US dollars they have, they don't have to buy yuan with it.
Both economies would suffer massive shockwaves, but the US has central bank tools to absorb the blow, while China destroys its own asset base with no way to recover the loss. They're not going to burn down their own house just to smoke out their neighbor.
Never say never.
Just Googling here: 10% of China's holdings would be $66B. Daily trading volume for US Treasuries is $1.2T.
The most the Fed has ever held on its balance sheet is $5.8T.
Maybe I missed a zero somewhere but China's sale of 10% of their holdings seems in isolation like an awfully manageable problem. A different discussion if there were a ton of other crazy stuff going on in the world economy and they just piled on, perhaps.
As someone who's very well informed on that corner of financial markets.. you're absolutely right. 66bn might cause some minor moves in yields but it's far from a disaster.
US 10y bond auctions are often >40bn in size, with shorter maturities well over that. The seller of this debt (China) wouldn't want to smash the market because they'd only be shooting themselves in the foot.
Point being that it's an easily digestible amount of debt.
As someone who's very well informed on that corner of financial markets, you probably realize that China controls much more than $660 billion of US Treasury securities.
I'm sure you also realize that when a large holder sells a significant stake of any asset, traders anticipate they will sell more in the future.
Example 1: Berkshire Hathaway selling $47 million of BYD and the market price dropping 8% the next day, wiping out $10 billion of market value.
Example 2: Musk selling 0.6% of his stake in Tesla, and the market price dropping 15% the next day, wiping out $187 billion in market value.
Example 3: UK government announcing a planned sale of 0.3% of above-ground gold, and the global gold price plunging 10% before the first auction.
Thank you, you've explained much better what I meant by "the call".
> As someone who's very well informed on that corner of financial markets, you probably realize that China controls much more than $660 billion of US Treasury securities.
How much do they control? Please cite your sources.
I can find some information about "shadow holdings" (exciting!) held in Luxembourg and Belgium [0] but I cannot imagine those treasuries would add up to a multiple of what's officially on the books and held by the Chinese government and Chinese companies. Interesting thought, though.
[0] https://www.cnbc.com/2026/05/19/central-banks-offload-us-tre...
Yes, you are right, but that doesn't mean China doesn't have an enormous amount of leverage and influence.
With all the grandstanding of the "great" POTUS, I'm yet to see a material effect of his so called tariffs. All I'm seeing are home-goals.
> that doesn't mean China doesn't have an enormous amount of leverage and influence.
Explain?
How does that play out for them? China gets a lot of money from US spending.
US monopoly money has value mainly because of petro dollar.
Once that wraps up, US money will be not much more than toiletpaper.
And that is wrapping up because world has like ~60years of oil left at current consumption rates.
As the world moves over to electricity instead of fossil fuels, the petrodollar/yuan isn't going to matter as much anymore.
I once thought that this would be true, but wars are fought with oil burning machinery. And so countries with oil will always be able to play bully. A country with strong access to oil also has the most important resource in war. Batteries are simply less dense energy storage.
Wars are not always going to be fought with oil burning machinery. China, along with everyone else, is working real hard on that.
I think you would be surprised, but yes, there will be a lot of battery tech on the field.
> US monopoly money has value mainly because of petro dollar.
A currency’s value reflects confidence in the economy issuing it. The dollar is backed implicitly by the size, productivity, and stability of the US economy.
No, the currency has value only in as so far as you can buy stuff you need with it.
Lets say you're Germany, US imports make up only 6.9% of total import value(Netherlands is 7.1% and China 12.5% on top) closely followed by Poland with 5.9%.
Take most countries in Europe, US imports are a rather small very modest portion.
So it doesn't make that much sense that US dollar would be particularly valuable.
After all - you really don't actually even buy that much stuff from US, thus the need for the US dollar isn't particularly large, and why would it be?
On the other hand, if you want to buy oil however, you need the dollar. That is what makes the dollar valuable.
Now if you can buy oil from Iran, Russia or whatever in some other currencies, why would you need the stinking dollar?
I mean, you do import some US goods, but not that much really.
Why would you have confidence in an economy that regularly has insane trade deficit (1 trillion now)?
Once the petrodollar goes, thing will go tits up. And it will, because there's only 60years of oil left in the global oil reserves in the tank.
What are they going to buy instead? And how are they going to sell any significant amount of their holdings without taking a bath themselves?
How would china “make the call on us debt”?
That debt is all treasury securities bought on the open market.
They can’t demand the US pays them back early any more than you can.
China doesn't hold all that much debt, so this doesn't apply
But anyway, a large debt holder can bind up the borrower by announcing they think the debt they hold is worthless. The impact would depend on how much debt it was, with a large amount being dumped almost certainly increasing the cost of borrowing.
It depends on how that debt is owned.
If I go to a bank, and I get a loan, then the terms of that loan allow the bank to do that.
If I sell a bond, then I set the terms, and I say that you can’t do that. You buy the bond understanding the terms.
China owns treasury bonds, they don’t have the ability to “bind up the borrower”. They can sell their bonds at market prices, but they can’t say “this debt is worthless, pay us now”. That’s not how bonds work.
That's isn't what I am arguing. I'm arguing that a very large holder of bonds can potentially set the market price. If they move the market for the older bonds, they will move the market for new issues.
The Chinese (or anyone, for that matter) can't just 'call' US debt. They can either wait for it to mature or sell it to someone else.