alt Hacker NewsI can't speak for bankruptcy filings, but I've sat through small claims sessions on a few occasions and probably half are for credit card debt. Most of the time the defendant doesn't show and assuming the bank wins, damages can be trebled in my state.
And: Credit card rates are way, way up compared to just a few years ago. Earlier this year WSJ reported average APRs in the US were over 24% (https://www.wsj.com/finance/banking/the-credit-card-rate-cap...). Most people do not read the fine print on their credit card applications, or compare them to what rates used to be like.
Replies
Loughla • yesterday at 8:01 PM
What good would it do to compare rates to what they used to be?
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I wonder if there's a death spiral there:
1. Economy gets worse and some people are no longer able to keep up with their credit card payments. They default.
2. Credit cards increase rates to compensate for the increased risk since a greater fraction of their users are failing to pay.
3. People who are financially stable and literate see the increased rates and put fewer things on credit.
4. The remaining pool of people using credit now has an even greater fraction of people who aren't financially solid.
5. Go to 1.