How do people have so much debt?

[Tennis]

I don't get it. Whatever happened to living within your means?

For example :

In quarter two of 2016, U.S. consumers accumulated $34.4 billion of debt on credit cards. Compare that with the second quarter of 2007 (six months before the start of the Great Recession) when $31.9 billion was reached. Cumulatively, Americans have effectively borrowed a total of $912 billion of credit card debt as of the end of quarter two of 2016. Again, it may be useful to compare that figure with the accumulation of credit card debt at the end of the second quarter of 2007, when this type of debt reached a total of $898 billion.

The U.S. is on track to break $1 trillion in outstanding credit card debt for the first time in history. Other reports discuss Americans’ obsession with spending money through credit cards, stating that the average American household has $15,675 of credit card debt

What does it mean to have 16K debt exactly? 16K owing on your credit card bill?
Why would someone spend so much when they can't even pay it off at the end of the month?
This just doesn't add up.

[Saiona]

Cuz we dumb

[Sevarin]

people are stupid. my wife's family are a perfect example of this.

they drove semi trucks for a living, then decided to haul campers with personal vehicles instead. so instead of going out to get a decent truck that could do the job, they all went out and got 70-100k loans for luxury model trucks that they were going to destroy within two years and wouldnt pay off before they were dead.

lo and behold... their trucks are starting to die about two years later, and they arent even half way paid off. granted they also enjoy wasting money every chance they get.


i told them it was a horrible idea, and maintenance on them would be murder. they still went for it, swearing it would be so much better.

[Kaosadvokit]

people are stupid. my wife's family are a perfect example of this.

they drove semi trucks for a living

Generally speaking, people that drive trucks for a living aren't exactly smart or they are degenerates. (I know not all of them fall into these categories).

[the game]

I mean alot of things can contribute to it. From being irresponsible with money all the way to mental illnesses. When bipolar people hit manic episodes many of them are notorious for spending great amounts of money.

[Varaben]

people are stupid. my wife's family are a perfect example of this.

they drove semi trucks for a living, then decided to haul campers with personal vehicles instead. so instead of going out to get a decent truck that could do the job, they all went out and got 70-100k loans for luxury model trucks that they were going to destroy within two years and wouldnt pay off before they were dead.

lo and behold... their trucks are starting to die about two years later, and they arent even half way paid off. granted they also enjoy wasting money every chance they get.


i told them it was a horrible idea, and maintenance on them would be murder. they still went for it, swearing it would be so much better.

The quote in question is about credit card debt. Did they spend 100k on a credit card?

On topic, I have no idea. Probably has something to do with wages being stagnant but costs and inflation going up every year.

[Sevarin]

Generally speaking, people that drive trucks for a living aren't exactly smart or they are degenerates. (I know not all of them fall into these categories).

to be fair, the pay is actually quite decent provided you dont really need an education for it. but no, i cant deny your point.

The quote in question is about credit card debt. Did they spend 100k on a credit card?

its not on a credit card, no. they got a bank loan, but they do have quite a bit of credit card debt as well.

i realize the thread was mainly about credit cards, but you dont need credit cards to be in debt.

[Deleted]

american public is just moronic as hell and spend money on stupid shit.

I made some retarded decisions and went from 15k in savings to almost going homeless q1 2016. I'm just working 30 hour weekly shifts in a grocery store in the UK and managed to save up near 4000$ equivalent by the end of the year, you'd have to be moronic beyond belief to go under.

[Varaben]

american public is just moronic as hell and spend money on stupid shit.

I made some retarded decisions and went from 15k in savings to almost going homeless q1 2016. I'm just working 30 hour weekly shifts in a grocery store in the UK and managed to save up near 4000$ equivalent by the end of the year, you'd have to be moronic beyond belief to go under.

To give you some context, I spend $1750 USD per month in student loans for me and my wife. My house payment and car payment is another 1750 (house + car + insurance total). It's expensive. That's $42k per year before food and utilities and discretionary costs. Now imagine you want to have a baby. It's easy to go under.

Edit: I realize my expenses are high. Student loans are high because we both went to grad school and we're paying hers off in 5 years instead of 10 (like mine). We consciously signed up for a shitty 5 years so that after that elapsed, we would have much lower expenses. My point is, things are expensive (cars and houses and education).

[Deleted]

To give you some contex, I spend $1750 USD per month in student loans for me and my wife. My house payment and car payment is another 1750. It's expensive. That's $42k per year before food and utilities and discretionary costs. Now imagine you want to have a baby. It's easy to go under.

It's easy to go under if you pay for 3 people's worth of expenses? makes sense, if you were single or had a partner that actually works you'd have tens of thousands in savings per year.

[Lady Dragonheart]

I don't have an real debt anymore. (I have debt for the sake of gaining more credit, but I can pay it off instantly with my bank account, should I ever desire to.) However, I used to have a large amount of debt which was accumulated by from exes that I had shared bank accounts and credit cards with that left me with the debt after severing their names from them after the debt ran up really high.

[gutnbrg]

theres alot of children replying to this thread...

[The Stormbringer]

I have over eighteen thousand dollars of debt at the moment, mostly from school, but a little from moving and buying my new computer. I'm working on paying it all off but it's a slow process.

[Deleted]

Cuz we dumb

Yes! That's it. Do you even know how many people build their fortune on that simple thing? Hahaha.

[Fauxpaws]

A lot of it has to do with impulse buying and not understanding the financial ramifications of interest.

If a person had to actually pay for everything with cash, they would be much more careful with how they spent their money. Being able to blindly put something on credit, is far too convenient (for their own good) for some people.

[Tennis]

To give you some contex, I spend $1750 USD per month in student loans for me and my wife. My house payment and car payment is another 1750. It's expensive. That's $42k per year before food and utilities and discretionary costs. Now imagine you want to have a baby. It's easy to go under.

That is expensive. Maybe delay having a baby till financially stable.
Also wait a second, $1750 a month for a car? There really isn't a need to spend that much...

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I have over eighteen thousand dollars of debt at the moment, mostly from school, but a little from moving and buying my new computer. I'm working on paying it all off but it's a slow process.

18K is a serious sum but would be worth it if the education provided you with a decent occupation.

[Underverse]

I only buy things with my credit card. But I pay 100% of the balance each month. I wonder if that is being counted in this calculation?

[xChurch]

A combination of companies/government pushing more debt as a way to boost spending, and the fact people don't make has much as they should be since min wage laws have failed to keep up.

[The Stormbringer]

That is expensive. Maybe delay having a baby till financially stable.
Also wait a second, $1750 a month for a car? There really isn't a need to spend that much...

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18K is a serious sum but would be worth it if the education provided you with a decent occupation.

It's the only reason I have the job I do now, working in the IT industry as computer support and preparing to train for further development and branching off in the field. You're right that it is a lot, but it's also a lot smaller than what a lot of other people wind up with.

[Lady Dragonheart]

That is expensive. Maybe delay having a baby till financially stable.
Also wait a second, $1750 a month for a car? There really isn't a need to spend that much...

Depends on the car, the length of the loan, the down-payment, as well as (likely) insurance, and any other financing. Also, it could be more than one car.