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Old 03-12-2018, 01:31 PM
 
Location: The Triad
34,091 posts, read 82,464,944 times
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Quote:
Originally Posted by SportyandMisty View Post
They, for example, buy new living room furniture.
The charge it so they can get the frequent flyer miles. Then they pay it off.
The consumer debt topic is about those who DON'T pay it off.

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Old 03-12-2018, 04:03 PM
 
105,708 posts, read 107,682,511 times
Reputation: 79329
Quote:
Originally Posted by Quietude View Post
Got a pointer to "what you read"?

And have you yet grasped that "consumer debt" and "all modes of credit card usage" are not the same thing?

When a consumer buys something, it's consumer spending no matter what medium is used to pay - including a credit card.

When a consumer leaves purchases on credit past the current cycle, it's consumer debt. Which is rising more steeply. Which has nothing to do with pay-off card users.
why are you harping on consumer debt ? i specifically referred to credit card dept which is only 1 piece of consumer debt and said i wonder how much of the increase in credit card debt is really not debt at all but transactors ..

apparently the numbers include both those that carry a balance and those that don't

"As of the end of December, revolving debt has “risen to $936 billion — up from $930 billion in November — the highest it’s been since the 2009 recession,” wrote Robert Harrow, a research analyst with ValuePenguin, a New York-based financial research company, in the study.

Revolving debt consists of open-ended accounts with variable interest rates and pre-determined credit limits. Examples are credit cards and home equity and personal lines of credit.

The average household debt of Americans is now $5,700, with the average American carrying $2,300 on credit cards, according to the ValuePenguin report.

These latest numbers, which are based on Census Bureau and Federal Reserve Board reports, include both those who pay off their card debts each month (“transactors”) and those who carry credit card balances from month to month (“revolvers”).


https://nypost.com/2016/02/27/credit...009-recession/

from money magazine :

"35% of credit card users don’t carry a balance–they pay off their bill every month, like you’re supposed to. They use credit cards for convenience, and perhaps to generate bonus points and rewards, not because they need to borrow. "

Last edited by mathjak107; 03-12-2018 at 04:11 PM..
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Old 03-12-2018, 05:32 PM
 
Location: Aurora Denveralis
8,712 posts, read 6,665,997 times
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Quote:
Originally Posted by mathjak107 View Post
why are you harping on consumer debt ? i specifically referred to credit card dept which is only 1 piece of consumer debt and said i wonder how much of the increase in credit card debt is really not debt at all but transactors ..
If a credit card user pays off a purchase, it's no longer debt. Do you disagree?

If a credit card user pays off all purchases within a cycle, they are not debt. Do you disagree?
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Old 03-12-2018, 05:45 PM
 
26,147 posts, read 21,368,471 times
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Quote:
Originally Posted by Quietude View Post
If a credit card user pays off a purchase, it's no longer debt. Do you disagree?

If a credit card user pays off all purchases within a cycle, they are not debt. Do you disagree?
It depends on how it’s reported and when. I charge 3-5k a month and depending on when you took the snapshot it may appear im holding that debt but I pay it off monthly and recycle
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Old 03-12-2018, 05:52 PM
 
Location: Omaha, Nebraska
10,297 posts, read 7,882,664 times
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Quote:
Originally Posted by Lowexpectations View Post
It depends on how it’s reported and when. I charge 3-5k a month and depending on when you took the snapshot it may appear im holding that debt but I pay it off monthly and recycle
Exactly. I generally pay my credit cards balances off after the monthly statement has posted. As far as Equifax, Experian, and Transunion are concerned, I carry a lot of credit card debt, because what they see are the balances on those monthly statements - but in reality the only debt I carry is my mortgage.
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Old 03-12-2018, 06:06 PM
 
Location: Aurora Denveralis
8,712 posts, read 6,665,997 times
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Quote:
Originally Posted by Aredhel View Post
Exactly. I generally pay my credit cards balances off after the monthly statement has posted. As far as Equifax, Experian, and Transunion are concerned, I carry a lot of credit card debt, because what they see are the balances on those monthly statements - but in reality the only debt I carry is my mortgage.
I don't quite follow.

You use your card all month. You wait until you receive a statement. You pay off the whole amount due. - correct?

If so, that's the way probably 95% of people who "pay off their card each month" do it - not by sending in payment beforehand so that the statement comes with a zero balance due. Typically, using/paying in this manner results in zero interest due - no debt except in a narrow, technical and short-term sense.

What makes you think this shows you as having a lot of (or any) credit card debt?
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Old 03-12-2018, 06:09 PM
 
26,147 posts, read 21,368,471 times
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Quote:
Originally Posted by Quietude View Post
I don't quite follow.

You use your card all month. You wait until you receive a statement. You pay off the whole amount due. - correct?

If so, that's the way probably 95% of people who "pay off their card each month" do it - not by sending in payment beforehand so that the statement comes with a zero balance due.


What makes you think this shows you as having a lot of (or any) credit card debt
?

It depends on when your balance is reposted by the credit card to the credit bureaus. If they report before your payment is applied it could appear to an outside party that you always carry a balance. I do believe for credit reporting they have added a bit more information as to payment amount/frequency but as to the original topic it might not have that detail
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Old 03-12-2018, 06:41 PM
 
Location: Omaha, Nebraska
10,297 posts, read 7,882,664 times
Reputation: 27606
Quote:
Originally Posted by Quietude View Post
I don't quite follow.

You use your card all month. You wait until you receive a statement. You pay off the whole amount due. - correct?

If so, that's the way probably 95% of people who "pay off their card each month" do it - not by sending in payment beforehand so that the statement comes with a zero balance due. Typically, using/paying in this manner results in zero interest due - no debt except in a narrow, technical and short-term sense.

What makes you think this shows you as having a lot of (or any) credit card debt?
Quote:
Originally Posted by Lowexpectations View Post
It depends on when your balance is reposted by the credit card to the credit bureaus. If they report before your payment is applied it could appear to an outside party that you always carry a balance.
Lowexpectations nailed it. The balance on the card at the time the statement is closed is generally what is reported to the credit agencies. The payment due date (when I time my payment to arrive) is as much as two weeks later. So to the credit agencies it looks as though I always carry a high four-figure balance, purely because of the way the reporting is done.

In fact, if you think about it there's really never a time when the balance on my cards is actually zero, even though I pay my cards off in full monthly and never owe any interest. That's because by the time my payment for the current billing cycle is made, new charges which are a part of the next billing cycle (and will be reported on the next statement) have already been made on the card. My card balances will never be reported as zero to the credit agencies. So as far as they know, I'm carrying a balance.
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Old 03-12-2018, 07:42 PM
 
680 posts, read 1,912,753 times
Reputation: 592
Quote:
Originally Posted by Aredhel View Post
Lowexpectations nailed it. The balance on the card at the time the statement is closed is generally what is reported to the credit agencies. The payment due date (when I time my payment to arrive) is as much as two weeks later. So to the credit agencies it looks as though I always carry a high four-figure balance, purely because of the way the reporting is done.

In fact, if you think about it there's really never a time when the balance on my cards is actually zero, even though I pay my cards off in full monthly and never owe any interest. That's because by the time my payment for the current billing cycle is made, new charges which are a part of the next billing cycle (and will be reported on the next statement) have already been made on the card. My card balances will never be reported as zero to the credit agencies. So as far as they know, I'm carrying a balance.
Which is why I take a look at my current balance plus pending and pay off that amount on the closing date. if you know this is how it works, why do you actually wait till the payment due date?

Even though I spend $4-5K on my Amex per month, my credit report shows a zero balance.
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Old 03-12-2018, 08:12 PM
 
Location: Aurora Denveralis
8,712 posts, read 6,665,997 times
Reputation: 13501
Okay, so that's interesting. If some amount of credit card debt that is not carried month to month is included in the consumer debt totals... how do you correct the figures? Where would you get hard data (not polls or estimates) of how much money is actually being carried on credit cards, and how much is "phantom debt" - money spent through the card but not left there until a subsequent payment cycle?

(Not that I think this changes the picture much, MJ's contentions notwithstanding. The percentage of those carrying revolving debt vs those using "credit" cards as payment tools probably remains fairly steady over time. So significant increases or decreases in credit card debt/consumer debt are probably accurate within some fudge factors. There must be data to nail this down...)
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