Elena Bethea

So if you look prior to 1983, the median American family had zero non-mortgage debt. So they didn't have any student loans. They didn't have any auto loans. They didn't have any credit cards. They didn't have retail debt. They just had none. I mean, there's plenty of families who did have debt, right? But the median had none.

So if you look prior to 1983, the median American family had zero non-mortgage debt. So they didn't have any student loans. They didn't have any auto loans. They didn't have any credit cards. They didn't have retail debt. They just had none. I mean, there's plenty of families who did have debt, right? But the median had none.

I do also have, like, one of each type of allergy medicine. Oh, thanks.

I do also have, like, one of each type of allergy medicine. Oh, thanks.

If you look prior to 1983, the median American family had zero non-mortgage debt.

If you look prior to 1983, the median American family had zero non-mortgage debt.

There's always been people who have struggled financially. But yet for many, many decades, people navigated the world with more often than not, no debt.

There's always been people who have struggled financially. But yet for many, many decades, people navigated the world with more often than not, no debt.

So I was really interested in how credit worked, like how lending worked. And so I went online. to go work at Capital One right after I graduated college.

So I was really interested in how credit worked, like how lending worked. And so I went online. to go work at Capital One right after I graduated college.

You know, I had a mental model of somebody whose car breaks down and then they need to get to work. And if they can't fix their car, they're going to lose their job and then have a lot of money. Right. And as long as people are going to want or need to borrow money, you probably need to have like lenders who are offering things as an option. It's because we were meeting an unmet need.

You know, I had a mental model of somebody whose car breaks down and then they need to get to work. And if they can't fix their car, they're going to lose their job and then have a lot of money. Right. And as long as people are going to want or need to borrow money, you probably need to have like lenders who are offering things as an option. It's because we were meeting an unmet need.

Are the cats tussling, making too much noise?

Are the cats tussling, making too much noise?

Capital One has long boasted about the fact that it runs tens of thousands of experiments on its customers per year. It's a very widespread and systematic approach to finding ways to get the most in interest and fees from each family.

Capital One has long boasted about the fact that it runs tens of thousands of experiments on its customers per year. It's a very widespread and systematic approach to finding ways to get the most in interest and fees from each family.

You know, you apply for a credit card, you get an initial credit limit, and then over time that credit limit gets raised. A high percentage of all the debt people are in are coming from these credit line increases that they haven't requested and that aren't per se meeting any need, right? Because people weren't otherwise going to apply for credit.

You know, you apply for a credit card, you get an initial credit limit, and then over time that credit limit gets raised. A high percentage of all the debt people are in are coming from these credit line increases that they haven't requested and that aren't per se meeting any need, right? Because people weren't otherwise going to apply for credit.

And that sort of is the first thing that made me realize that a lot of this debt is not driven by what families decide that they want or need. It's really driven by how much banks decide that they want to lend.

And that sort of is the first thing that made me realize that a lot of this debt is not driven by what families decide that they want or need. It's really driven by how much banks decide that they want to lend.