Mark Cuban once said that credit card users “don’t want to get rich.” Now, U.S. credit card defaults have surged to levels not seen since the 2008 financial crisis – Capital One Finl (NYSE:COF)

U.S. credit card loan default rates have soared to levels not seen since the 2008 financial crisis. Credit card lenders wrote off as much as $46 billion in seriously delinquent loan balances in first nine months of 2024

What happened: According to the Financial Times, data compiled by BankRegData showed that this figure increased by 50% from the same period last year and was the highest in 14 years.

Mark Zandihead Moody’s Analyticspoints out that while upper-income households are getting along just fine, the bottom third of American consumers are financially exhausted. “Their savings rate right now is zero,” he said.

capital one COFThe nation’s third-largest credit card lender recently reported that its credit card charge-off rate hit an annualized rate of 6.1% through November, up from 5.2% a year ago.

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Although nearly $60 billion in consumer credit card debt was written off last year, $37 billion in debt on consumer cards remains at least one month past due. “Delinquencies are a sign of more pain ahead,” warned Odysseas Papadimitriou, head of consumer credit research firm WalletHub.

Why it’s important: billionaires like Mark Cuban and Warren Buffettwith financial experts Dave Ramseyspoke out against credit cards.

Buffett once advised a friend: “If I owed 18% of my money, the first thing I would do with all the money I had was pay it off. That would be much better than any investment idea I had.

Likewise, on The Dave Ramsey Show in 2014, Cuban sat down with financial advisor Ramsey to discuss topics such as credit cards, debt management, and wealth-building strategies. When asked about his views on credit card use, Cuban bluntly said, “If you use credit cards, you don’t want to be rich,” emphasizing that paying off credit card debt is a key factor in achieving financial success.

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