Now do total debt: government + corporate + household
Then add unfunded liabilities like pension benefits and healthcare promises for every federal, state and local government, school district and corporation.
A trillion of credit card debt is something like one half of one percent of total indebtedness.
I'm saying bond prices would drop sharply if China tried to rapidly sell even 10% of its holdings.
When bond prices drop, US interest rates go up, which hurts the real US economy.
And when bond prices drop, that devalues the remaining 90% of China's holdings, hurting China too.
The Fed could stabilize the bond market by printing dollars to buy the bonds itself, but that would devalue the dollar and drive up inflation in the US. When China tries to repatriate that wealth, they must sell dollars and buy yuan, which would drive up the value of the yuan, driving up the cost of Chinese exports, hurting their manufacturing sector.
Many years ago this "0% transfer" stuff was relatively new in the UK and a new outfit wanted to break into the market, they had two ideas which I guess they had costed as marketing ploys. First, the cards were a weird shape, this means there are a few applications where your card doesn't work, which is slightly annoying, but it's balanced by the brand recognition. Nobody cares which brand of rectangular plastic card you... oh, that's a weird shape.
But the Second was the easiest possible 0% transfer. To effect the transfer they write you a cheque for however much they'd agreed (let's say £1000) and you use that cheque to pay off a card or other line of credit. They charge 0% on this for 12 months.
What I, and lots of poor but money-savvy people did was sign up for the card. Deposit the cheque in an interet-bearing savings account, and set an alarm to pay the card off before that 0% expired.
So twelve months later you've made say £30 interest and you cut the card up. I don't know how many people did this, versus how many engaged with their product as they'd imagined. I know only two things:
1. I had about 50p outstanding balance to pay on my 12 month card, I figured they'd tell me I need to pay 50p within 30 days or whatever and if not they'd charge me extra - nope, they wrote saying "Your balance is negligible, we write off this tiny balance and don't expect to ever hear from you again".
2. This offer was never repeated. They did other 0% transfer offers but the "It's just a cheque" idea was never attempted again.
People who cannot afford to survive without this credit and need it to fill the wage expense gap for basic living needs.
This is why the unemployment rate is a poor metric. It doesn’t matter much if you have a job if its wages are insufficient for one to meet their basic needs on. Lots of employed folks, but folks barely treading water economically.
A silver lining is that with immigration constrained for the foreseeable future, wages will be pushed up over time through structural demographics further tightening labor supply.
I've been down to single-digit dollars, in situations where I was forced to choose between food or gas. I also had "never ever have any credit card debt" drilled into me from a young age, and as a result didn't even have a credit card at the time to make sure the temptation to use it wasn't an option.
I ate a lot of ramen, rice, or sometimes nothing, but eventually made it through. If I had racked up a bunch of debt I would have been poor much longer, though it might have been healthier for me.
Since wages have not kept up with inflation, it’s already factored in as inflation drives the total debt faster. Total debt rising without a corresponding rise in wages means an increase in interest and defaults in general.
A total measured over the entire US economy without adjusting for a variety of factors including inflation and population change seems like exactly the kind of thing you would expect from a news headline. How about average or per capita?
Does a balance that has not accrued interest count as debt for this measurement? I.e. people who always pay the statement.
The $1.26 trillion Federal Reserve figure includes both balances paid in full every month and balances accruing interest.
Convenience spending by "transactors" (roughly 35% of cardholders) who pay in full every month is something like $200 billion of this.
Do you have a citation for the 35% number? I wouldn't have thought it was that rare.
Let me Google that for you ...
Ah, here it is https://bpi.com/missing-factors-in-the-cfpbs-analysis-of-ris...
Technically, people who always pay the statement do have credit card debt until they pay, it's just free debt.
Now do total debt: government + corporate + household
Then add unfunded liabilities like pension benefits and healthcare promises for every federal, state and local government, school district and corporation.
A trillion of credit card debt is something like one half of one percent of total indebtedness.
When China's makes the call on US debt, its going to be very bleak day.
It would be bleak because the US won't pay, and that would crater both the US and China.
That's why China will never do this.
Better for both nations to extend and pretend.
Yes, you are right, but that doesn't mean China doesn't have an enormous amount of leverage and influence.
With all the grandstanding of the "great" POTUS, I'm yet to see a material effect of his so called tariffs. All I'm seeing are home-goals.
Are you saying the bond market would go without a bid?
I'm saying bond prices would drop sharply if China tried to rapidly sell even 10% of its holdings.
When bond prices drop, US interest rates go up, which hurts the real US economy.
And when bond prices drop, that devalues the remaining 90% of China's holdings, hurting China too.
The Fed could stabilize the bond market by printing dollars to buy the bonds itself, but that would devalue the dollar and drive up inflation in the US. When China tries to repatriate that wealth, they must sell dollars and buy yuan, which would drive up the value of the yuan, driving up the cost of Chinese exports, hurting their manufacturing sector.
It's mutually assured destruction.
How does that play out for them? China gets a lot of money from US spending.
The American consumer is an enigma
Who is buying things with near-30% APR loan?
That's what a 0% balance transfer is for right? Just play musical cards until the issuers blacklist you.
It's never 0% though. You pay a transfer fee (e.g. 5%). The 0% promo period is also limited.
The consumer is screwed either way, whether they try to "transfer" balances or not.
That very much depends.
Many years ago this "0% transfer" stuff was relatively new in the UK and a new outfit wanted to break into the market, they had two ideas which I guess they had costed as marketing ploys. First, the cards were a weird shape, this means there are a few applications where your card doesn't work, which is slightly annoying, but it's balanced by the brand recognition. Nobody cares which brand of rectangular plastic card you... oh, that's a weird shape.
But the Second was the easiest possible 0% transfer. To effect the transfer they write you a cheque for however much they'd agreed (let's say £1000) and you use that cheque to pay off a card or other line of credit. They charge 0% on this for 12 months.
What I, and lots of poor but money-savvy people did was sign up for the card. Deposit the cheque in an interet-bearing savings account, and set an alarm to pay the card off before that 0% expired.
So twelve months later you've made say £30 interest and you cut the card up. I don't know how many people did this, versus how many engaged with their product as they'd imagined. I know only two things:
1. I had about 50p outstanding balance to pay on my 12 month card, I figured they'd tell me I need to pay 50p within 30 days or whatever and if not they'd charge me extra - nope, they wrote saying "Your balance is negligible, we write off this tiny balance and don't expect to ever hear from you again".
2. This offer was never repeated. They did other 0% transfer offers but the "It's just a cheque" idea was never attempted again.
I actually have a no-rewards credit union credit card that has no balance transfer fees and the lowest APR I’ve ever seen on a credit card.
It has bailed me out of paying high interest rates and fees during hard times before.
People who cannot afford to survive without this credit and need it to fill the wage expense gap for basic living needs.
This is why the unemployment rate is a poor metric. It doesn’t matter much if you have a job if its wages are insufficient for one to meet their basic needs on. Lots of employed folks, but folks barely treading water economically.
A silver lining is that with immigration constrained for the foreseeable future, wages will be pushed up over time through structural demographics further tightening labor supply.
https://www.marketplace.org/story/2026/08/11/credit-card-del...
https://www.marketplace.org/episode/2026/07/16/workers-are-b...
https://news.ycombinator.com/item?id=49294240 (citations)
https://news.ycombinator.com/item?id=49027462 (citations)
https://news.ycombinator.com/item?id=47680794 (citations)
TLDR Wages must go up, price levels will not come down.
Wow look at Mr. “I’ve-never-been-poor”, bragging about his privilege. What a flex!
You have no idea who I am or what my history is.
Bad take.
I've been down to single-digit dollars, in situations where I was forced to choose between food or gas. I also had "never ever have any credit card debt" drilled into me from a young age, and as a result didn't even have a credit card at the time to make sure the temptation to use it wasn't an option.
I ate a lot of ramen, rice, or sometimes nothing, but eventually made it through. If I had racked up a bunch of debt I would have been poor much longer, though it might have been healthier for me.
Wow, you hit rockbottom but still could take on debt?
...I'm not saying this is good, but doesn't the existence of inflation mean we'll always keep breaking this record?
Not adjusted for inflation, so useless. At least do % of gdp which is also flawed but better than this.
Since wages have not kept up with inflation, it’s already factored in as inflation drives the total debt faster. Total debt rising without a corresponding rise in wages means an increase in interest and defaults in general.
A total measured over the entire US economy without adjusting for a variety of factors including inflation and population change seems like exactly the kind of thing you would expect from a news headline. How about average or per capita?