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from the I-can-spend-until-I-reach-my-credit-limit,-right? dept.
If you have credit card debt, it may be time to scale back what you spend on luxury purchases.
But we’re not talking about doing without small luxuries like your morning coffee or an afternoon snack – things like your car loan or lease, leisure travel, dining and more can make a bigger difference.
A new CreditCards.com poll shows U.S. consumers who have credit card debt are outspending debt-free households in seven of nine discretionary spending categories (see chart). However, few are willing to cut back on any of their luxury purchases.
In fact, 18 percent of Americans who have credit card debt are unwilling to trim expenses in nine categories, including dining out, leisure travel and clothing (see chart). This despite the fact that the average credit card APR is nearly 18 percent.
[...]Our luxury spending poll also found:
- Many can live without dining out. Dining and takeout is the category all respondents – in debt or not – are most willing to cut in half. Still, less than half of those with credit card debt (48 percent) would trim their dining budgets, which average $2,186 per year.
- But vacations are a big budget item many won’t budge on. The average household with card debt spends $2,211 per year on leisure travel. But only 3 in 10 of those respondents would be willing to cut their travel spending in half.
- Cars, haircuts and cellphone plans are the biggest must-haves. The three categories people in debt were least willing to cut in half are personal care and beauty (23 percent), cellphone services and upgrades (25 percent) and car loans or leases (26 percent).
- Cut my streaming? You’re dreaming. Only 39 percent of respondents with debt would be willing to cut back on subscriptions services such as Netflix, Spotify and Xbox Live. However, at $1,198 per year, it’s the second-least-costly luxury expense among this group.
https://www.creditcards.com/credit-card-news/luxury-spending-poll/
(Score: 5, Interesting) by richtopia on Friday July 12 2019, @05:50PM (18 children)
People who make financial decisions that result in debt on average also make poor financial decisions about getting out of debt? What a strange correlation!
More surprising to me is how much people spend in the article. The annual car expenses in the article could purchase my pickup three times over, not to mention the beauty and clothes costs where I'm spending less than 100USD annually.
(Score: 5, Insightful) by DeathMonkey on Friday July 12 2019, @06:39PM (10 children)
Agreed.
However I do challenge this one:
For a lot of people those are required expenses to remain gainfully employed.
(Score: 1, Interesting) by Anonymous Coward on Friday July 12 2019, @07:35PM (5 children)
Personal care/beauty is $1,146 for debtors, $945 for non-debtors. There are very few excuses for spending anything at all on this. For example:
a. You are a male in an industry where a sculpted haircut is expected. (examples: waiter at Michelin starred restaurant, TV presenter, trial lawyer...) You'll need to spend about $15 for this. If you get a haircut every 2 weeks, it'll cost you $390 per year.
b. You are a whore. You'll need plastic nails, lots of makeup, and other junk that will cost money.
The rest of us can go natural, shave it off, or run a clippers over it set to 5/8".
(Score: 2) by DeathMonkey on Friday July 12 2019, @08:10PM (4 children)
Except the question is what costs are you willing to cut in half.
The non-debtors are only spending 20% less.
A quick google of men's haircuts puts the price more like $20 which puts you at $480 per year. Half of $1146 is $573. So they have less that $100 for an entire year's worth of deodorant/toothpaste/shaving stuff/soap.
(Score: 2) by JoeMerchant on Friday July 12 2019, @09:01PM
Around here, the haircut is $18 - but I tip well, so it's $23. But, then, I only get it cut once every 6-8 weeks (thus the bigger tip), so annual expense is about $170.
For the kids, yeah, 8/8 on top and 5/8 on the side, it's not even about the money, it's just quicker and easier than driving them to the barber.
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 0) by Anonymous Coward on Friday July 12 2019, @09:45PM
Now I know why it is that they always make a big deal out of handing out "hygiene kits" to the homeless! And here I thought it was the make them smell less bad, or because actual housing was too expensive, because of credit cards.
(Score: 1) by khallow on Saturday July 13 2019, @06:09AM (1 child)
At once a month, that's only $240 per year. At once every two months, that's only $120 per year.
(Score: 0) by Anonymous Coward on Saturday July 13 2019, @12:14PM
I have to trim my hair at least once a week because it grows so fast - this isn't something that can be calculated broadly because it varies wildly.
(Score: 4, Touché) by Gaaark on Friday July 12 2019, @09:20PM (2 children)
Man... all it costs me for a haircut is sex with my wife, lol.
Men's haircut... $15
Women's haircut... $2000.000
Home haircut...priceless.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(Score: 4, Funny) by bzipitidoo on Saturday July 13 2019, @01:17AM (1 child)
You got me beat. 2 or 3 times a year, I get a haircut for $5 from the beauty school on their sale days. Maybe I need to talk more about those hot looking young women learning how to cut hair, get the wife worried enough to do it herself.
(Score: 0) by Anonymous Coward on Sunday July 14 2019, @02:27PM
dude
if i want sex i have to watch porn. my wife has catholic guilt mixed with not wanting kids, so its a terrible sin to have sex according to the propaganda her father espouses because then you might get pregnant and might have an abortion and god punishes all women for being sluts even if they are married.
the guy even camped out in front of a planned parenthood that only handed out medications and did std testing and he tried to tell them they had other options and they didnt have to go through with it, and when they acted like he was high, he called them unappreciative sluts!
and so y ou bring this sort of... issue.... to a bedroom. i get to watch porn in another room. aye aye yay if I only knew what I was getting into
(Score: 0) by Anonymous Coward on Saturday July 13 2019, @02:16PM
Sure, but you can still greatly reduce those expenses. You don't have to have a super expensive cellphone plan or car, or spend massive amounts on your hair.
(Score: 3, Interesting) by JoeMerchant on Friday July 12 2019, @08:58PM (2 children)
~$5150/yr for cars, $429 per month - seems pretty steep, unless that's for two cars...
We have 4, cars currently - which is not the most efficient on insurance, but it's not double what two would cost either, and there's a certain reliability cushion about being able to fix a broken one at leisure rather than needing it immediately.
Thinking about our car expenses of the last 30 years:
A lot of this is lifestyle choice - right now we're choosing to have 4 older cars, it seems quite a bit cheaper than two newer ones. Maintenance is slightly higher on the older cars, but nothing like finance charges and loan interest.
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 2) by richtopia on Friday July 12 2019, @09:20PM (1 child)
The article also does not state if these numbers are for a family or averaged to costs per person. As a single guy in my 30s I understand I spend a lot less annually than my peers who have children.
(Score: 2, Informative) by Anonymous Coward on Saturday July 13 2019, @12:14AM
Yes it does -- numbers are PER HOUSEHOLD.
(Score: 0) by Anonymous Coward on Saturday July 13 2019, @12:11AM
I agree, those numbers seem ridiculous. I suspect it's because most people are just really bad with money. Both debtors and non-debtors in the article spend about $18K/yr in total on those categories. My 3-person household living in a large and expensive metropolitan area spends just $12K/yr on those categories, most of it on travel and dining.
(Score: 2) by driverless on Saturday July 13 2019, @07:28AM (2 children)
Can someone from the US explain what "APR" is? I keep seeing this in relation to loans, but every time it's used whoever uses it assumes you already know what it means. A google search just turns up more examples of writers who assume you already know what an APR is. What is it?
(Score: 2) by linuxrocks123 on Saturday July 13 2019, @08:24AM (1 child)
It's the interest rate charged on the credit card balance, annualized without regard to the fact that monthly compounding of the interest on the debt is happening, since that way the number looks lower for advertising purposes.
APY, or Annual Percentage Yield, is used by banks to advertise the rates they give you on CD and savings accounts, and includes the additional amount you get from letting the balance compound monthly, since that way the number looks higher for advertising purposes. But, to be fair to the banks, they also do quote you the APR, just in small print.
For more info: https://en.wikipedia.org/wiki/Annual_percentage_rate [wikipedia.org]
(Score: 2) by driverless on Monday July 15 2019, @07:46AM
Thanks! Once you know that "APR" means "annual percentage rate", the definition is locatable via Google. Over here it's just called "interest rate".