6 ms·

Technically, people who always pay the statement do have credit card debt until they pay, it's just free debt.

by 9cb14c1ec0 1mo ago

pocksuppet 1mo ago
Not just technically. They literally have credit card debt in every sense of the word.
- ticulatedspline 1mo ago
  while true the connotation of the title would imply meaningful debt. And people who simply use cards for convenience and never hold a past due balance isn't really meaningful debt. It's almost like counting the "debt" between ringing up your items at wal-mart and paying. For those 30 seconds you owe money. Based on some quick stats you could totally turn that into a useless headline "Americans accrued 4.1 billion dollars of debt every 30 seconds in 2025"
- jjav 1mo ago
  > Not just technically. They literally have credit card debt in every sense of the word. I mean technically yes that is absolutely correct. But we all know it's not what people think of as "debt", so as previous poster said, those should really be tracked separately. It is silly to consider the float between purchase time to payment time to be debt of the same type as debt carried over month to month. For one thing, debt basically always (temporary offers aside) pays interest. The float between purchase to payment pays no interest. But technicalities aside, the stats on credit card household debt would be much more revealing if they separated these numbers. They even indicate opposite things: If the temporary float balances are going up, that suggests consumers are spending more and comfortably paying it, so the economy is doing well. Whereas if the accruing monthly debt balances are going up, that's a sign the consumer is in trouble so the economy is probably doing badly.
- happytoexplain 1mo ago
  Not every sense - in the colloquial sense, people don't count that as being "in debt".
rootusrootus 1mo ago
I'm still surprised they don't track it separately. According to my credit report I have what appears to be a running balance of 5 or 6 grand. I suspect a machine learning algorithm could watch the way the balance bounces around and accurately guess that I pay it off each month, but there's no distinction on the credit report at least. In my mind a balance where you only pay off a chunk each month is different entirely from one where you always pay the entire amount. And I'd put a third category in there, too, credit card debt for which you are only making the minimum payment. This all seems like valuable data when assessing creditworthiness.
- twoodfin 1mo ago
  The credit bureaus score based on the % of credit you use (and of course that you pay on time). This is basically equivalent from a credit risk perspective, the banks don’t really care what % is interest vs. principal.
  - rootusrootus 1mo ago
    > This is basically equivalent from a credit risk perspective, the banks don’t really care what % is interest vs. principal. That seems counterintuitive. Someone carrying a growing balance at $5K making the minimum payment is obviously not the same kind of risk as someone who spends $5K/month on their credit card and then pays it off.
    - twoodfin 1mo ago
      Growing balance = greater % of credit used.
      - flowerthoughts 1mo ago
        So the metric GP is after is credit used per credit user? Normalizing the effect of an increase in credit users, and not assuming it's uniformly distributed. Seems simpler to just publish the delinquent debt separately.

Technically, people who always pay the statement do have credit card debt until they pay, it's just free debt.

pocksuppet 1mo ago

Not just technically. They literally have credit card debt in every sense of the word.

ticulatedspline 1mo ago
while true the connotation of the title would imply meaningful debt. And people who simply use cards for convenience and never hold a past due balance isn't really meaningful debt. It's almost like counting the "debt" between ringing up your items at wal-mart and paying. For those 30 seconds you owe money. Based on some quick stats you could totally turn that into a useless headline "Americans accrued 4.1 billion dollars of debt every 30 seconds in 2025"
jjav 1mo ago
> Not just technically. They literally have credit card debt in every sense of the word. I mean technically yes that is absolutely correct. But we all know it's not what people think of as "debt", so as previous poster said, those should really be tracked separately. It is silly to consider the float between purchase time to payment time to be debt of the same type as debt carried over month to month. For one thing, debt basically always (temporary offers aside) pays interest. The float between purchase to payment pays no interest. But technicalities aside, the stats on credit card household debt would be much more revealing if they separated these numbers. They even indicate opposite things: If the temporary float balances are going up, that suggests consumers are spending more and comfortably paying it, so the economy is doing well. Whereas if the accruing monthly debt balances are going up, that's a sign the consumer is in trouble so the economy is probably doing badly.
happytoexplain 1mo ago
Not every sense - in the colloquial sense, people don't count that as being "in debt".

rootusrootus 1mo ago

I'm still surprised they don't track it separately. According to my credit report I have what appears to be a running balance of 5 or 6 grand. I suspect a machine learning algorithm could watch the way the balance bounces around and accurately guess that I pay it off each month, but there's no distinction on the credit report at least. In my mind a balance where you only pay off a chunk each month is different entirely from one where you always pay the entire amount. And I'd put a third category in there, too, credit card debt for which you are only making the minimum payment. This all seems like valuable data when assessing creditworthiness.

twoodfin 1mo ago
The credit bureaus score based on the % of credit you use (and of course that you pay on time). This is basically equivalent from a credit risk perspective, the banks don’t really care what % is interest vs. principal.
- rootusrootus 1mo ago
  > This is basically equivalent from a credit risk perspective, the banks don’t really care what % is interest vs. principal. That seems counterintuitive. Someone carrying a growing balance at $5K making the minimum payment is obviously not the same kind of risk as someone who spends $5K/month on their credit card and then pays it off.
  - twoodfin 1mo ago
    Growing balance = greater % of credit used.
    - flowerthoughts 1mo ago
      So the metric GP is after is credit used per credit user? Normalizing the effect of an increase in credit users, and not assuming it's uniformly distributed. Seems simpler to just publish the delinquent debt separately.