Credit card debt hits 1 trillion! How much do you owe?

[Shoedog112]

On 1/22/2024 at 4:59 PM, BenjaminNicholas said:

Zero cc debt with $300k+ of open credit.

I played the churn game for years and have now settled into a handful of cards that give me the benefits I use most.

I'll only keep a balance going if the card offers me 0%.  Otherwise, it's paid off monthly.

What is the churn game? Is that when you transfer balances and get rewarded?

[+ BenjaminNicholas]

1 hour ago, Shoedog112 said:

What is the churn game? Is that when you transfer balances and get rewarded?

First, have a high FICO score to get the best CC offers.  It could be points, miles, cashback or a combo.

Get the card and satisfy the terms of the deal.  Likely a minimum spend in a certain number of months.

Churn the card by paying it to zero and shelving it, or just cancel if you don't think there will be a reward clawback.

There are a ton of CC blogs and groups out there that go into insane, minute detail.  Every card.  Every offer.  Everything.  Even how to snag more points/miles/rewards through retention agents.  These are the people who likely have a spreadsheet for everything in their lives.  

I don't fault them:  I just don't have the willpower to do the same.

 

 

[marylander1940]

Interesting video n this subject:

 

[Luv2play]

Scary debt story. One in 9 American card holders in default as of 2024. 1.2 trillion dollars of accumulated credit card debt by Americans and average balance over 6k$.  Average rate of 22.2 percent. Where will it end.

[+ SundayZip]

On 1/25/2024 at 7:55 PM, BenjaminNicholas said:

First, have a high FICO score to get the best CC offers.  It could be points, miles, cashback or a combo.

Get the card and satisfy the terms of the deal.  Likely a minimum spend in a certain number of months.

Churn the card by paying it to zero and shelving it, or just cancel if you don't think there will be a reward clawback.

There are a ton of CC blogs and groups out there that go into insane, minute detail.  Every card.  Every offer.  Everything.  Even how to snag more points/miles/rewards through retention agents.  These are the people who likely have a spreadsheet for everything in their lives.  

I don't fault them:  I just don't have the willpower to do the same.

 

 

I got my first Delta American Express card a few years back to get bonus frequent flyer miles. I then closed it less then a year later. A few year later, I did the same thing and got more Delta bonus miles. The third time I tried it, they said: You can have the card but no more "new card member" bonus miles for you, buddy.  

I've done some credit card churn since, but not a lot. For the most part, I stick with a couple cards with good reward programs and no fees on international transactions. 

[Jim_n_NYC]

When I was in the Navy (way back when) I had only one credit card that I had maxed out on the limit.  I got a loan to pay it off (to lower the interest payments) but then proceeded to run it back up to its limit again.  About a year later I was stationed in a more remote place where I didn't spend much money (plus I didn't need a car, so I sold mine) so I finally paid off all my debts and have never owed money again on anything (but especially credit cards).

Now, since I lost my flight benefits from my airline (due to being out on disability and unable to pass a flight physical), I got into accumulating miles and points from credit cards as a way to keep traveling...but I still never carry a balance and meticulously pay them off every month.

This "hobby" is not for everyone, though.  It takes a lot of discipline to not get in debt and lose control.

[+ Vegas_Millennial]

Pay with cash whenever possible.  It was the best financial change I made in 2020.  Damn the "free" travel miles or cash back rewards.  I find that I spend less when my wallet is empty and have to wait until the next paycheck arrives; more than enough to offset the loss of miles or cashback rewards.

Edited October 17, 2024 by Vegas_Millennial

[+ PhileasFogg]

11 hours ago, Vegas_Millennial said:

Pay with cash whenever possible.  It was the best financial change I made in 2020.  Damn the "free" travel miles or cash back rewards.  I find that I spend less when my wallet is empty and have to wait until the next paycheck arrives; more than enough to offset the loss of miles or cashback rewards.

And yet, I have well over a million miles with delta and just made diamond medallion using my Delta Amex  for purchases I would have made anyway (I pay it off weekly as a check on my spending)

[marylander1940]

On 10/18/2024 at 2:50 AM, PhileasFogg said:

And yet, I have well over a million miles with delta and just made diamond medallion using my Delta Amex  for purchases I would have made anyway (I pay it off weekly as a check on my spending)

Life is all about the choices! 

Some perks matter, others don't.

I have 3% cashbacks in travel expenses unfortunately is limited to $200 per 3 trimester.

[+ BenjaminNicholas]

On 10/18/2024 at 1:50 AM, PhileasFogg said:

And yet, I have well over a million miles with delta and just made diamond medallion using my Delta Amex  for purchases I would have made anyway (I pay it off weekly as a check on my spending)

This is exactly right. 

If you have the money to pay off the card monthly, living on cash only makes little sense.

You might as well take the perk if you can afford to.

As with most situations in life, you can play the game well once you understand the T&Cs

[MikeThomas]

On 1/7/2024 at 10:49 AM, Bokomaru said:

As an aside, @Vegas_Millennial I urge you, if your loans are low or no interest, to consider starting up your Roth or 401k contributions again. The tax loss incurred (now or in the future) could well outweigh the interest payments on the debt.

 

Not only do you lose the tax benefits, but you also lose the compounding effect of the return on your investments. I respect your drive to pay off your credit card debt, but don’t let your 401(k) go for too long without additional contributions .

[misterhumphries]

Men, let me brag a bit that as of 15th October,  I have finally paid off all my credit cards! I took Dave Ramsay's Financial Peace University course last year and it has changed how I regard credit, spending, and saving.😎

It feels lighter not to have to juggle minimum payments each month. My income is my own again.

The trick now will be to forget I have the cards; not to give into the temptation to use them again for anything but extreme emergencies.

Edited October 26, 2024 by misterhumphries

[+ FrankR]

40 minutes ago, misterhumphries said:

Men, let me brag a bit that as of 15th October,  I have finally paid off all my credit cards! I took Dave Ramsay's Financial Peace University course last year and it has changed how I regard credit, spending, and saving.😎

It feels lighter not to have to juggle minimum payments each month. My income is my own again.

The trick now will be to forget I have the cards; not to give into the temptation to use them again for anything but extreme emergencies.

I am happy for you - glad you got value out of it. Just be careful how far you go in drinking the Dave Ramsey cool-aid. His budgeting ideas are solid.  His investing ideas are less so, in my opinion.

[misterhumphries]

1 hour ago, FrankR said:

I am happy for you - glad you got value out of it. Just be careful how far you go in drinking the Dave Ramsey cool-aid. His budgeting ideas are solid.  His investing ideas are less so, in my opinion.

Oh, no! Ramsey is valuable only for inspiration on savings and credit usage. I wouldn't take his advice on investing. I'm also aware of the Cult-of-Ramsey. His claque of money cheerleaders all have published books they are hawking. Buying any of them would eat into any cash saved from financial restraint in other areas.

[Guest]

Sadly about 6k in credit cards. Always paying *slightly* above the minimum until a random windfall wipes out most of the balance.

In my early 20s I had a series of financial hardships and had to finance sudden moves with them.

The most annoying card of mine is for sure the old Barclays card that was linked with Apple. I bought a laptop in 2018 with it (before I had any financial literacy) and set it to minimum payments. I still have about half the balance left on it and can pay it off, but I don't even remember my login details. Still haven't quite worked out a solution to it since the card is pretty much discontinued.

[Guest]

Just now, BodeBrentwood said:

Sadly about 6k in credit cards. Always paying *slightly* above the minimum until a random windfall wipes out most of the balance.

In my early 20s I had a series of financial hardships and had to finance sudden moves with them.

The most annoying card of mine is for sure the old Barclays card that was linked with Apple. I bought a laptop in 2018 with it (before I had any financial literacy) and set it to minimum payments. I still have about half the balance left on it and can pay it off, but I don't even remember my login details. Still haven't quite worked out a solution to it since the card is pretty much discontinued.

If I sound financially illiterate, it's because I basically am 🫠

[Jim_n_NYC]

6 hours ago, BodeBrentwood said:

Sadly about 6k in credit cards. Always paying *slightly* above the minimum until a random windfall wipes out most of the balance.

In my early 20s I had a series of financial hardships and had to finance sudden moves with them.

The most annoying card of mine is for sure the old Barclays card that was linked with Apple. I bought a laptop in 2018 with it (before I had any financial literacy) and set it to minimum payments. I still have about half the balance left on it and can pay it off, but I don't even remember my login details. Still haven't quite worked out a solution to it since the card is pretty much discontinued.

Do you still have the card?  If so, call Barclays and try to get your log in details, or pay it off over the phone...the number will be on the back.  It's not that hard to find this info to get it taken care of.

As an aside, when I went through my CC fiasco in my 20's, one thing I did was to take out a loan at a bank and used that to pay off my credit card.  The interest rate was around 8% which is much lower than the ~21% that most banks charge now.

[+ ThroatCummer]

I had $550k of personal debt and wiped it with a CH7.  

It's just debt. You aren't going to die over it.  

It was actually from my business. During the bad times, I would use my personal cards to grow the business, pay invoices, etc. There were business loans too of course but sometimes when you're the Founder you do whatever it takes at the moment. I took a $80k cash advance once to make payroll so my employees would get paid. 

Business wound up not doing too well and had to wipe and start fresh so filed BK7.  

Ahhhh, AMERICA.  

It was actually really sad and hurtful, I tried so hard to dig out of that hole but just couldn't. Regulation changed and licenses from government were revoked and it put that company out of business.

Also, about six months after BK, I got card offers from the same companies I had discharged debt with. Within 24 months, my credit score was back above 650.  Don't believe those stories that it kills you for a decade. It doesn't. 

Edited October 28, 2024 by ThroatCummer

[harlow]

Thank goodness I was able to pay all of my cards down to $0 and clean up my credit.  Now I'm able to use my cards like cash by paying them off monthly while earning travel rewards.  I went from a FICO score below 500 to 805 and now I feel like I have a new lease on life ♥️

[pubic_assistance]

On 10/22/2024 at 2:10 PM, BenjaminNicholas said:

If you have the money to pay off the card monthly, living on cash only makes little sense.

Absolutely. I get tons of points by using my AMEX for virtually all purchases. I pay the card in full every month. During the extended shut down of Covid that card came in handy paying bills when my cash was needed to cover mortgages that were normally paid by tenants. ( who disappeared during Covid ..and I was left with empty apartments to pay for ) and very little income from my architecture business which also saw extensive delays.

[+ Charlie]

6 hours ago, pubic_assistance said:

Absolutely. I get tons of points by using my AMEX for virtually all purchases. I pay the card in full every month. During the extended shut down of Covid that card came in handy paying bills when my cash was needed to cover mortgages that were normally paid by tenants. ( who disappeared during Covid ..and I was left with empty apartments to pay for ) and very little income from my architecture business which also saw extensive delays.

I have had an Amex card for decades, but I used to think that there weren't many places where I could use my Amex card, and used it only when paying large travel expenses, like a plane ticket. However, lately I've found that it is accepted for lots of things with no questions asked: groceries, a dental implant, auto repairs, cremating my spouse, etc. It has become my go-to card for almost any charge over $100. But like anything else I buy with a credit card, I pay it off in full every month.

[+ BenjaminNicholas]

5 hours ago, Charlie said:

I have had an Amex card for decades, but I used to think that there weren't many places where I could use my Amex card

In the '80s and '90s it used to be that way, but Amex has worked hard to get into most places now.

Merchants still don't love it, as they charge more in transaction percentage and are incredibly customer-focused.

I've had some major chargebacks with Amex in the past and they've never batted an eyelash.

[harlow]

On 12/8/2024 at 4:31 AM, pubic_assistance said:

Absolutely. I get tons of points by using my AMEX for virtually all purchases. I pay the card in full every month. During the extended shut down of Covid that card came in handy paying bills when my cash was needed to cover mortgages that were normally paid by tenants. ( who disappeared during Covid ..and I was left with empty apartments to pay for ) and very little income from my architecture business which also saw extensive delays.

I’m the same way now. All my purchases go on my Amex cards if possible and I use them like cash.  Any place that doesn’t accept Amex like Costco I use my Chase card. It’s amazing how many points you can rack up just from your everyday expenses. 

[LaffingBear]

I owe nothing.

I havent carried credit card debt since my 20s and in my first job, setting up household.  I paid the balance in full every month.  

I bought my car at lease-end.  I paid off my mortgage.

[Act25]

On 10/28/2024 at 3:15 PM, ThroatCummer said:

Also, about six months after BK, I got card offers from the same companies I had discharged debt with. Within 24 months, my credit score was back above 650.  Don't believe those stories that it kills you for a decade. It doesn't. 

Lenders like customers who've just come out of bankruptcy as they can't file bankruptcy again for up to eight years.  Meaning lenders can use aggressive collections efforts (lawsuits, garnishments) and there is nowhere for the creditor to escape this time.