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Americans’ Credit Card Balance Hits $1.3 Trillion
Congratulations to Americans: They managed to score new records both for overall credit card debt an
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I am delighted that American consumers have run down those “excess savings” that dogged us coming out of the pandemic!
Don’t you need have a lot of available credit that you do not use in order to game the credit score system? I know I have multiple cards with credit available in excess of twenty times what I spend each month.
Actually, maybe it is in excess of 40 times, maybe 80 times, I don’t even know for sure because they just keep increasing my limits in the hope that someday I might miss a payment.
I walked through this in a lengthy comment two or so weeks ago. If you have high (or even high-ish) income, 760+ credit, a very long credit history and, say, a small business that’s eligible for cards too, this system is eminently gameable. Obviously the banks know that, and they’d have it no other way because, as you said, the worst-case scenario for them is that you get your perks and you pay your card off and they never get any interest. In a “best” case (for them), the borrower falls on hard times and banks get a mob-style vig.
But yeah, to speak directly to your question, banks and card issuers have paid me thousands over the years in sign-up bonuses, rewards points, rewards matching and an absurd constellation of other incentives and I’ve probably paid them less than $100 (total) in interest over that same period. And yeah, it feeds on itself because the more of these things you run up and pay off, the more they tend to increase your limit and the more (and the better) the new offers you get, resulting in an enormous limit which in turn boosts your credit (as long as you keep the balance on any one card below 30% of the limit for that card), and around you go on your way to 800+.
If you’re confident you can’t go broke, credit card perks and rewards and new-member bonuses, etc. are hugely exploitable. The only limiting factor is making sure you don’t have too many hard inquiries on your credit report over any one-year rolling period. And, of course, always pay them off within the 0% teaser rate window. (Not financial advice. Consult your AI advisor.)