The Atlantic - Are Americans Really That Bad With Money?

[Prodigal Daughter]

Forgive me if this is posted elsewhere. This popped up in my news feed today (though it looks like it was published yesterday). It's a study of household finances across the world and I thought some pieces were very interesting. Such as 40% of Americans have credit card debt (similar with Canadians and Brits), but only 2% of Italians do. Also interesting tidbits on who owns homes and who moves the most often.

http://www.theatlantic.com/business/archive/2016/03/americans-shortsighted-in-debt-and-bad-at-investing/472680/?utm_source=SFFB

edited to correct my percentage typo

[Sjalabais]

You're talking about the graph "The Percentage of Households With Some Form of Debt, by Country", credit card debt is way lower. It is very interesting though, for decades, Italy has been called the "sick man of Europe", with galloping public debth, an insider/outsider labour market etc. - so it's not so easy to lend money now with one's future as collateral?

[Prodigal Daughter]

Ah, yes, sorry, mixed up two graphs! Over all debt and CC debt. CC debt by Italians being 1.4% of households compared to 40% in the US. I don't know that much about their overall economy, but it is a fascinating difference in household finances.

[Tetsuya Hondo]

How difficult is it to obtain a credit card in these countries? How loose are their banks with credit? I suspect that's driving the differences as much as anything.

Also, I wonder if I would be considered to be an American with credit card debt? I put everything on my card, but I pay it in full each month.

[maco]

Also, I wonder if I would be considered to be an American with credit card debt? I put everything on my card, but I pay it in full each month.

I wondered the same.

Maybe it's just my visit to my Sicilian cousins, but I don't think of Italy as a particularly wealthy (or spendy?) country. Rugs, furniture, etc. do not seem to be upgraded at anywhere near the rate Americans would upgrade that stuff. It was very 1950s-1970s in their home, the hospital, the B&B... hotels I stayed at elsewhere in Italy too.

[zephyr911]

Bit of a leap, "has credit card debt" => "is bad with money".

I'm carrying about $20K right now at 0% APR. The equivalent amount has earned a couple grand in investment returns as I worked out my plan to pay it off with free cash flow. NW is up almost $100K in the past year. Am I bad with money? ;)

(OK, I realize this kind of use is rare, or CC companies wouldn't exist)

[Prodigal Daughter]

Bit of a leap, "has credit card debt" => "is bad with money".

I'm carrying about $20K right now at 0% APR. The equivalent amount has earned a couple grand in investment returns as I worked out my plan to pay it off with free cash flow. NW is up almost $100K in the past year. Am I bad with money? ;)

(OK, I realize this kind of use is rare, or CC companies wouldn't exist)

Exactly.

[MsSindy]

Bit of a leap, "has credit card debt" => "is bad with money".

I'm carrying about $20K right now at 0% APR. The equivalent amount has earned a couple grand in investment returns as I worked out my plan to pay it off with free cash flow. NW is up almost $100K in the past year. Am I bad with money? ;)

(OK, I realize this kind of use is rare, or CC companies wouldn't exist)

It's not as rare as you think....I'm doing the same thing.  Borrowed $20k at 0% (~$300 admin fee) and have it invested at 12%.  When my 18 months of 0% interest are up, I'll roll it over to other cards - I just incur the admin fee which is more than covered by my profit.

[MasterStache]

Bit of a leap, "has credit card debt" => "is bad with money".

I'm carrying about $20K right now at 0% APR. The equivalent amount has earned a couple grand in investment returns as I worked out my plan to pay it off with free cash flow. NW is up almost $100K in the past year. Am I bad with money? ;)

(OK, I realize this kind of use is rare, or CC companies wouldn't exist)

It's not as rare as you think....I'm doing the same thing.  Borrowed $20k at 0% (~$300 admin fee) and have it invested at 12%.  When my 18 months of 0% interest are up, I'll roll it over to other cards - I just incur the admin fee which is more than covered by my profit.

I've never thought of doing this. Hmmmmm......

[2lazy2retire]

Bit of a leap, "has credit card debt" => "is bad with money".

I'm carrying about $20K right now at 0% APR. The equivalent amount has earned a couple grand in investment returns as I worked out my plan to pay it off with free cash flow. NW is up almost $100K in the past year. Am I bad with money? ;)

(OK, I realize this kind of use is rare, or CC companies wouldn't exist)

It's not as rare as you think....I'm doing the same thing.  Borrowed $20k at 0% (~$300 admin fee) and have it invested at 12%.  When my 18 months of 0% interest are up, I'll roll it over to other cards - I just incur the admin fee which is more than covered by my profit.

Maybe not rare around MMM, but in the general population? - I'd say risking extinction

[Northwestie]

But----------have invested at 12% - that seems a reach.

[sailinlight]

I cannot imagine you can generalize whole populations based on three metrics.  What about incomes, CoL, tax rates, savings rates.  From what I see, living in Italy, people do not have credit card debt because it is pretty rare to be offered a credit card.  I imagine that there is not enough disposable income for banks to push credit cards.  Would you say Americans are so bad with money if their credit card debt was higher, but also savings rate?

[KCM5]

Bit of a leap, "has credit card debt" => "is bad with money".

I'm carrying about $20K right now at 0% APR. The equivalent amount has earned a couple grand in investment returns as I worked out my plan to pay it off with free cash flow. NW is up almost $100K in the past year. Am I bad with money? ;)

(OK, I realize this kind of use is rare, or CC companies wouldn't exist)

It's not as rare as you think....I'm doing the same thing.  Borrowed $20k at 0% (~$300 admin fee) and have it invested at 12%.  When my 18 months of 0% interest are up, I'll roll it over to other cards - I just incur the admin fee which is more than covered by my profit.

I'd like to know more about this investment that's earning you 12%

[larmando]

Getting a credit card in Italy is as easy as elsewhere. Most people I know there have one. The culture is just against debt, so they pay it off at the end of the month, mostly automatically.

[Luck12]

But----------have invested at 12% - that seems a reach.

She has it invested with Dave Ramsey.