Because wages are insufficient. Credit fills the gap to survive. Half of bankruptcies in the US are from medical debt, for example. In 2023, approximately 36.8 million Americans, or 11.1%, lived below the poverty line. ~50% of Americans carry a balance, and the average U.S. household with credit card debt has a balance of around $6,065.
You're assuming these consumers of credit card products can pay off their cards (transactors) when the data shows, broadly, that the consumer is stressed financially. Consumers are relying on credit cards because they cannot afford not to (revolvers).
From what I've read (not your links), roughly about 40% of Americans with credit cards don't carry a balance month to month. That's not most, but it is many. Which is what was said:
> MANY folks carry zero credit month to month
Even if 40% is 10x too high, and I'm pretty sure it isn't, 4% of all credit card holders is still a hell of a lot of people. As far as I can tell you haven't actually contradicted the claim.
You are still looking at a minority to define a universal trend.
Some consumers may be stressed. That doesn't explain why credit cards use has dominated across all income ranges for decades.
It seems like you are trying to shoehorn a pet issue into an unrelated question.
Edit: you still seem to be missing the question. It isn't why credit debt is so high. The question is why so many people use credit cards. What you are saying may be true, but it is answering it an entirely different question.
>People would use debit cards if they had the funds.
This is the part that simply isn't true. The rich use credit cards too. Less than half of credit card owners carry a balance from month to month.
> The higher cost of everything from housing to high-tops to haircuts are a major culprit. Although inflation has moderated since it peaked in June 2022, Americans—particularly lower-income families—are relying more on credit cards to cope with the sticker shock.
> “They used credit card debt to supplement their incomes to maintain their purchasing power,” says Mark Zandi, chief economist at Moody’s Analytics.
> A few years ago, low interest rates plus a host of pandemic-era programs—stimulus payments, enhanced food stamp benefits, pauses on student loan payments and eviction proceedings—made this new math work for families’ budgets. But those financial supports have been discontinued, and for borrowers who were barely treading water financially, these programs couldn’t have been eliminated at a worse time.
Credit card rates are high because they can be, if you need financing you have nowhere else to go except perhaps a payday lender or other hard money source. This is why there is recent talk of capping interest rates at 10%. People would use debit cards if they had the funds, they don't, which is also why overdraft fees were a source of billions of dollars in fees for commercial banks.
Credit cards are expensive short term financing.
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