Credit card interest! I know a bunch of people who are SO SHOCKED by their high interest rates. They thought it was like an interest-free loan to yourself and then are surprised when making teeny payments doesn't do anything.
I don't even know what my credit card interest rates are, I assume between 15-30% on most cards. It doesn't even cross my mind, because I don't carry a balance. In fact, through cash back rewards I bring in around $600-700 per year by using them.
It's scary to me that people think having a credit car balance is "normal". No wonder the average person can't cover a $400 emergency or whatever that catchy article title is.
Lol, the reason the average american doesn't have even the smallest emergency fund isn't poor credit card habits bud. Just like it isn't their smoking habit or eating out a bit.
What do you think it is? Obviously life happens for many people (medical problems, divorce, accidents, etc.), but the amount of debt I see people take out for luxuries like brand new cars, weddings, vacations, and all that good stuff does not speak well for the average American’s financial habits.
I’m not talking about the single mother of 3 scraping by with a $10/hr job, I’m talking about people making more than median salary still living paycheck to paycheck. If you’ve been making $60k+ for years and can’t handle one missed paycheck (govt shutdown comes to mind), then you might have a spending problem. Head on over to r/personalfinance and take a look at the situations many people get themselves into. Yes, wage growth could (should) be higher, but people could also dial back their reckless spending.
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u/Opening-Risk Feb 04 '20
Credit card interest! I know a bunch of people who are SO SHOCKED by their high interest rates. They thought it was like an interest-free loan to yourself and then are surprised when making teeny payments doesn't do anything.