Mark Cuban Once Said Credit Card Users 'Don't Want To Be Rich.' Now, US Credit Card Defaults Have Skyrocketed To Highest Levels Since 2008 Financial Crisis

U.S. credit card loan defaults have skyrocketed to levels unseen since the 2008 financial crisis. Credit card lenders wrote off a staggering $46 billion in seriously delinquent loan balances in the first nine months of 2024

What Happened: This figure, which represents a 50% increase from the same period in the previous year, is the highest in 14 years, according to data compiled by BankRegData, reported The Financial Times.

Mark Zandi, the head of Moody's Analytics, pointed out that while high-income households are managing, the bottom third of U.S. consumers are financially exhausted. He stated, “Their savings rate right now is zero.”

Capital One COF, the US’s third-largest credit card lender, recently reported that its annualized credit card write-off rate hit 6.1% as of November, up from 5.2% a year ago.

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Despite nearly $60 billion in consumer credit card debt being written off in the past year, another $37 billion remains on consumers’ cards that are at least one month overdue. “Delinquencies are pointing to more pain ahead,” warned Odysseas Papadimitriou, head of consumer credit research firm WalletHub.

Why It Matters: Billionaires like Mark Cuban and Warren Buffett, along with financial expert Dave Ramsey, have openly voiced their disapproval of credit cards.

Buffett once advised a friend, “If I owed any money at 18%, the first thing I’d do with any money I had would be to pay it off. It’s going to be way better than any investment idea I’ve got.”

Similarly, during a 2014 appearance on The Dave Ramsey Show, Cuban sat down with financial advisor Ramsey to discuss topics like credit cards, managing debt, and strategies for wealth accumulation. When questioned about his views on credit card usage, Cuban was blunt, stating, “If you use a credit card, you don’t want to be rich,” stressing that paying off credit card debt is a key element in achieving financial success.

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