Why are so many Americans in debt ?

[BadPenny]

The fact can’t be denied, Americans owe more money on their credit cards than anyone else and the country has a negative savings rate.

Why do so many Americans spend more than they have? Can’t they wait to buy that big TV, that refrigerator with the ice dispenser or a new espresso machine?

Why are so many Americans in debt?

[Name Deleted]

The fact can’t be denied, Americans owe more money on their credit cards than anyone else and the country has a negative savings rate.

Why do so many Americans spend more than they have? Can’t they wait to buy that big TV, that refrigerator with the ice dispenser or a new espresso machine?

Why are so many Americans in debt?

I think the big problem with credit cards is it doesnt feel like you are spending money when you zap plastic. I ran up a $3000 bill in my card to go to Australia and am now paying down the debt which has to be paid in one payment. In Japan you have to pay the total balance or they cancel your card. They have revolving credit in Japan but the interest is expensive. If you pay it off in one go you get free use of their money for one-two months.

With US cards you can pay minimum balances indefinitely roll it over and simply rack up more interest.

Rampant consumerism is another thing as well as issuing cards to students with no income but high credit limits. They run up to the limit and then get another card to borrow more money to pay it off.

[smork]

People are morons. I was once a moron, but I saw the light after paying 18%APR on $20K credit card debt.

Been debt free for 4 years (well, buying a car now, but it's well within my budget).

[BadPenny]

With US cards you can pay minimum balances indefinitely roll it over and simply rack up more interest.

That’s what the credit card companies want people to do, perpetual debt.

They have loan sharks for that here in Japan.

[jacksmama]

I think there's good debt and bad debt a la Robert Kiyosaki (boo, I know). But I do believe this to be true.

There are many businesses who take out business loans to expand companies or get VCs to fund them to get into some niche market. Or property investors who purchase buildings to get income from rents, etc. I think these are examples of good debt where money is generated b/c of the debt.

But I think most Americans continually put themselves into debt where the debt is not used to generate income. Keeping up with the Jone's mentality I guess.

People need to be able to live within or even below their means, but that doesn't mesh with most people's mentality.

[Listerine]

Americans are being robbed by the hated BUSH. It is rumoured that he steals cash from the pockets of his illiterate and poorly dressed minions.
Have pity on an American today, wink at every American you meet!!

[smork]

Americans are being robbed by the hated BUSH. It is rumoured that he steals cash from the pockets of his illiterate and poorly dressed minions.
Have pity on an American today, wink at every American you meet!!

Better yet, give 'em cash! (I take all major currencies)

[Listerine]

Yes, I agree!!!

[Moobies]

I've got about X grand (embarrassed to admit how much) still to go on my credit card, and about 25g's for my graduate and undergraduate degrees.

I have learned the hard way to stop living beyond my means and to avoid the instant-gratification disease that plagues my compatriots.

I am happily off the credit cards and put off big purchases until I have the cash. What a novel concept for a USer, eh?

[Listerine]

Blame your CAR!!
All the filthy scum who crap on J-girls for buying brand bags never stop to consider that they have lots of money to buy bags-BECAUSE THEY DON'T HAVE TO BUY A CAR!!
I blame the VILLIAN Bush for the automobile AND your credit card problems!!
That ROTTEN guy!!!

[Gone Asiatic]

I, for one, am not....at all!

[BadPenny]

I, for one, am not....at all!

Good for you.

I am also a debt free American. I have heard that about 1/3 of American credit card holders pay off their bill each month. The credit card industry calls them deadbeats.

Good luck with that student loan and finishing off that credit card Moobies.

[ruserious]

Credit cards = free money.


who doesn't love free money?

[BadPenny]

Credit cards = free money.


who doesn't love free money?

Rus, every time I read a couple of your posts that make sense and I start to think that maybe you are not dumber than dog sh!t I read a post like this and return to the realization that you are.

[husspaw27]

because america loves to instill the idea that without going to college you will be nothing for the rest of your life. so you go, most people cant afford to have their mum and dad pay for it all up front (and F- those whose parents can and did). so then the student loan people rape the bank accounts of people for 30 years after they come out. then of course after 2 or 3 years of an entry level job at say 9 bucks or so, they raise the minimum wage to 7 or 8 for everyone who DIDNT go to college (and in theory have no large debt) and when prices go up to correct the minimum wage increase (there in defeating the purpose of it in the first place) us 9 dollar joes get no raise and squeezed even harder! no wonder japan is the place to be!!

[Gone Asiatic]

because america loves to instill the idea that without going to college you will be nothing for the rest of your life. so you go, most people cant afford to have their mum and dad pay for it all up front (and F- those whose parents can and did). so then the student loan people rape the bank accounts of people for 30 years after they come out. then of course after 2 or 3 years of an entry level job at say 9 bucks or so, they raise the minimum wage to 7 or 8 for everyone who DIDNT go to college (and in theory have no large debt) and when prices go up to correct the minimum wage increase (there in defeating the purpose of it in the first place) us 9 dollar joes get no raise and squeezed even harder! no wonder japan is the place to be!!

One advantage having served in the US military: tuition assistance and the GI Bill = B.A. (mine - asian studies) from an acredited university and no debt.

[husspaw27]

that is true about the GI bill. but if you look at the average college campus its full of would be draft dodgers (if there still was abdraft) and people who think bush was piloting all 4 planes on 9/11! so not everyone would take that. then there are sports scholarships and etc. but really the lack of a labor market in america is forcing everyone into school and debt for jobs that dont usually pay off . and thats a big problem. you open a few decent mills or factories in each city, it would go far. i mean EVERYONE cant look for a job in 'computers' right?

still id say the other problem is companies and consumers are trapped in this cycle of 'imaginary' money. everything on a credit or debt card. and since so many places emphasize the speed of pay pas or whatever, people take it. it reaches a point where people dont use cash anymore, its bad because everythings got a fackin fee to it that you end up throwing away money everyday. it drove me insane when i was essentially forced into direct deposit paychecks and i was no longer allowed to pay my rent in cash. all my bills were getting automatically paid and i hated never keeping track.

because of this i cant function in america after living here. i like paying my bills in cash, and in person. knowing i can take out what i need save the rest and that i never use plactic, except when i bought a plane ticket , had no choice, but then 10 minutes later i had paid it off online, i know the CC companies hated that one! it seems strange to many that i got off plastic and went back to money but ill never go back and i think thats the key to beating debt.

[BadPenny]

It does seem odd that the notion of C.O.D. has gone out of fashion. Those quick and easy payments are not so easy down the line. I guess you should probably stay in Japan if you want to use only cash in your day to day life, just try to buy something with a $100 bill in the States, they freak out “wow, a hundred dollars !!!, I can’t change that”. Here in Japan you can buy a 10 yen candy with a 10,000 yen note no problem.

The weirdest part about the monetary system in the US for me is checks; the check is in the mail, I’ll write you a check, the check bounced etc. What is up with all those checks? Maybe they are moving away from it with more direct deposit now but I’ll bet that the good old check will be around for a while.

The collusion between loan companies and staff at universities that has come to light lately should be a crime; the whole industry needs to be overhauled. It seems like young people would be better off if they worked for a decade or so, built up a nest egg and then went to uni so they wouldn’t get ripped off by all the interest they have to pay on those loans.

[Guru]

I picked every single one of the options.

[static void]

Think of it this way... Historically, money used to only be in the hands of the few, the elite. Most people were farmers. The elite started companies and hired employees, paying them whatever they chose. Things like minimum wage, strong unions, etc. came later. Money in the hands of a few, no regulation, and no concern for worker's rights meant that the economy was mostly stagnant. Only after the government instituted things like minimum wage and regulated employee rights did the average person have enough money to do more than just scrape by. More businesses could be created, and more people could be hired by those companies AND get paid a certain wage, etc. This enabled the middle class to grow. That's right, government regulation "keeping things fair" stimulated the middle class. Economies can only grow when the middle class is strong. In fact, after the New Deal, more people than ever before could attend universities, own a home etc. To you conservatives out there, this "redistribution of the wealth" isn't a bad thing. It helps everyone, even the elite. Of course the elite (Republicans) still hates government intervention and wants to run businesses completely unfettered -without any concern for minimum wage, air quality, drug safety, etc. I'm not talking about socialism here, OK? I'm saying that without the government being there to keep things fair, you'd have a greed-based free-for-all. Just like having the teacher in the room keeps the kids from erupting into anarchy, the government effectively "lets you" have capitalism that works. Sure, the free market still solves things naturally through the self-corrective mechanisms of failure and opportunities, BUT it has to be regulated or it doesn't work for anyone but the top 1%. Lately, especially during the Bush years, things have started to look like the pre-New Deal era again, a greed-based free-for-all.

What I'm saying is that lately...within the past 20 years, there have been several trends like union busting and marginalization, not many increases in minimum wage, Bush policies allowing more and more job outsourcing, etc. It all adds up to less and less money for the average person. BUT the middle class is accustomed to the post-New Deal good life, the 1990s good life. People still feel entitled to their new cars, etc. They have no choice but to turn to using credit cards more and more to pay for it because "doing without" has been something of a foreign concept to the last couple of generations. The elite credit card companies make this easier and easier at the same time. That's it a nutshell.

SV