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Established Contributor
Posts: 1,141
Registered: ‎02-07-2017
0 Kudos

Re: Americans are suddenly defaulting on their credit cards

I think this article explains some other things, such as why Synchrony is so stubborn on giving out CLI's on my Amazon card (requiring at least 650 TU) and why my new Walmart card will probably have a low SL starting out. I actually didn't go into Ch 7 BK until 2014 though that was in large part the result of things that happened during '08-'10. Will have to take especial care from here on out (this is a good incentive to, among other things, pay down my secured card, transfer the balance when I can do it without jacking up util, and close it out to consolidate my portfolio).

Rebuilding credit since 12/14 Ch7 BK discharge. FICO 9/13/17:TU 658/EX 694/EQ 688 FICO 8 or 667 FICO 9 (Penfed), VS 3.0 9/13/17: TU 704/EX 684/EQ 697. $800 Amazon Prime Store Card, $951 Cap One secured Platinum MC, $1200 Walmart Store Card, $2000 Apple FCU Platinum Visa, $3000 Penfed Power Cash Rewards Visa, $3500 Cap One Quicksilver MC, $3600 Discover It, $4300 Overstock Store Card, $10k PenFed used car loan, $5k Navient student loan. In the garden as of 7/2/17 AND THIS TIME I REALLY MEAN IT!!! (unless I get a preapproval I can't refuse...)
Moderator
Posts: 30,809
Registered: ‎12-13-2013

Re: Americans are suddenly defaulting on their credit cards


Thomas_Thumb wrote:

gdale6 wrote:

I have been letting balances rise and am hording the cash converted into metals. I have always had a plan should the economy start to go off its track.


Ok - it looks like you are targeting one of the five investments, metals, recommended in "The Death of Money" by James Rickards. Key point is it should be in physical form (coins or bullion). Industrial metals not included in the portfolio. The other four investments - per the book - are:

 - Land (either undeveloped in a prime location or with agricultural potential). NOT land with structures.

 - Fine art including the broader range of collectibles such as true classic cars. Low weight portable collectibles are best per James because they are portable.

 - Alternative funds (natural resources, water, energy). Maybe a wind or solar energy farm. Perhaps a water desalination plant.

 - Cash (this is needed and serves a needed purpose at least until a calamity occurs)

 

I'm not sold on what James Rickards advocates but, I do believe undeveloped and farm land has long lasting staying power regardless of money devaluation. Land can be leased to those that farm - no need to run a farming operation on it directly.  By brother in law has a house on 64 acres of land on the edge of urbanization. He leases 40 areas to a farmer. He paid under $2000/acre 20 years ago and could get upwards of $20,000/acre today based on nearby land sales to developers. Nice low taxes due to farming.


Physical precious is what I purchase and in coin form. I have never invested in the paper markets for such.

"If there's a lack of money in your life, understand that feeling worried, envious, jealous, disappointed, discouraged, doubtful or fearful about money can never bring more money to you, because those feelings come from a lack of gratitude for the money you have."

"Reactions are powerful creators because they contain every element needed to manifest—they're a combination of thought, belief, and feeling in action. Positive reactions create more positive things, and negative reactions create more negative things. If you can respond to negative situations calmly and lightly, instead of with emotional turbulence, what happens next in your life will be so much better."

- Rhonda Byrne
Valued Contributor
Posts: 2,133
Registered: ‎04-01-2015

Re: Interesting...CC defaults up significantly

[ Edited ]

Revelate wrote:

Seems like MSN is late to the party as were talking about this back in April, FWIW I saw the increase in defaults starting in 11/2016 in my Lending Club account (I was soley in the 3 bottom tranches) though I wasn't smart enough to think this was a full market issue.

 

I'm not certain what the data suggests really as it's still well within historical norms as the average is like 5% historically looking at one of their other charts; though of course the spike is what they're looking at... that said based on my April / May LC results I suspect Q2 Synchrony isn't going to be much better. 

 


For those who like data - Below is a link to the most recent quarterly report on household debt and credit (May 2017) and a few graphs from the report:

 

https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2017Q1.pdf

 

Total debt.jpg

 

90 day delinquencies.jpg

 

90 day transition.jpg

collections graph.jpg

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........LN Auto 940 LN Home 870 TU Auto 902 TU Home 950 (4/2017)
Contributor
Posts: 76
Registered: ‎07-27-2015

Re: Americans are suddenly defaulting on their credit cards

Many people are simply over extended. Living beyond their means.......and using every excuse to justify it.

You can only live a $75k lifestyle on $45k income for so long before it catches up to you.

I'm not repeating the financial mistakes I made in the past. However many people I know did not learn their lessons, simply because of their mentality....

Some of my favorite excuses are.......

Little man can't get ahead.
You will always have a car payment.
My employer is a tight was.
Comparing themselves to others....spending to impress.
The list could get long......

I'm not the 1%. Nowhere near it. But I've made choices and decisions so I don't have to participate in the next economic downturn.
New Contributor
Posts: 83
Registered: ‎03-19-2015
0 Kudos

Re: Americans are suddenly defaulting on their credit cards

Interesting how Amex being so selective results in fewer defaults. Not shocking though. I hate to say this but for many Americans, credit cards are "Free money"  I have so many friends who spend recklessly on dining and entertainment. 5 bucks here, 5 bucks there. it all adds up.

775 (Equi by Citi)
760 (Trans by Cap1,Barclay,Discover)
757 (Exp by Amex)
Amex 22k Discover It 5.3k CF 4.6k Citi Diamond 4.5k Barclays 4.5k
Cap1 Visa 4.25k Cap1 MC 3k Freedom 2.5k Amazon 2k BoFA 1.8k
Senior Contributor
Posts: 6,742
Registered: ‎04-11-2016

Re: Americans are suddenly defaulting on their credit cards

What I find to be most troublesome are people on this forum that are at say 60% aggregate utilization on their credit cards and are in the CC forum asking for advice on which card to app for next, or "would I be approved if I applied for..." threads.  These people can't even pay off the 60% utilization they have now in a reasonable amount of time (a couple of years?) yet they're perfectly willing to open the door to take on more debt.  I feel like this is a major problem.  The chances of this behavior ending well is slim to none.

New Contributor
Posts: 83
Registered: ‎03-19-2015

Re: Americans are suddenly defaulting on their credit cards

^^ Combine that with 70% of Americans living paycheck to paycheck.

 

How the heck are resturants and malls packed every weekend? Am I supposed to believe its the other 30%? hahahaha

775 (Equi by Citi)
760 (Trans by Cap1,Barclay,Discover)
757 (Exp by Amex)
Amex 22k Discover It 5.3k CF 4.6k Citi Diamond 4.5k Barclays 4.5k
Cap1 Visa 4.25k Cap1 MC 3k Freedom 2.5k Amazon 2k BoFA 1.8k
Valued Contributor
Posts: 2,678
Registered: ‎05-31-2013

Re: Americans are suddenly defaulting on their credit cards


BrutalBodyShots wrote:

What I find to be most troublesome are people on this forum that are at say 60% aggregate utilization on their credit cards and are in the CC forum asking for advice on which card to app for next, or "would I be approved if I applied for..." threads.  These people can't even pay off the 60% utilization they have now in a reasonable amount of time (a couple of years?) yet they're perfectly willing to open the door to take on more debt.  I feel like this is a major problem.  The chances of this behavior ending well is slim to none.


+ the cheering section pushing them on to ask for more and more CLI's w/o asking any info to determine if said person is already where they need to be... I am sure everyone doesn't need or qualify to have a 25k CL...just b/c someone has a 30k or so @ Lowes,etc.... doesn't mean we all need one...It's not for util. if you using 60+ %.

 

 


Senior Contributor
Posts: 6,742
Registered: ‎04-11-2016
0 Kudos

Re: Americans are suddenly defaulting on their credit cards

I agree.  Too often we preach greater limits, more cards, etc. (I'm guilty of this as well) when we should be preaching more about sound, healthy credit behavior.

Contributor
Posts: 76
Registered: ‎07-27-2015

Re: Americans are suddenly defaulting on their credit cards

For the DW and I, it's all about cash liquidity. The plastic is nothing more than a means to earn rewards. Have not paid a penny of credit card interest in years.

We make less than $100k a year. Every dollar coming in, is accounted for......right down to the latte from Starbucks. A real budget has given us so much freedom.

We get mocked by friends and some family because we don't drive the latest cars, have the biggest tv, etc. But what amuses me is when life happens to them, like a transmission going out in the car......to them it's a financial panic attack. To us it's a minor inconvenience. I also find it funny how many of them make a lot more than we do, but can't even cover something minor like battery or alternator.

Don't even get me started about job losses either.......

Sometimes it's not how much you make, but how you manage what you do make.

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