Elena Bethea

On the surface, it doesn't sound so bad, when in reality, the amount that people tend to borrow on their credit card is proportional to what their credit limit is, right? So as people's credit lines go up and up, they end up borrowing proportionally more.

On the surface, it doesn't sound so bad, when in reality, the amount that people tend to borrow on their credit card is proportional to what their credit limit is, right? So as people's credit lines go up and up, they end up borrowing proportionally more.

Take, for example, somebody who tends to use an average of like 60% of their credit limit. That person is going to use 60% if they have a credit line of $3,000, 60% if they have a credit line of $5,000, of $8,000.

Take, for example, somebody who tends to use an average of like 60% of their credit limit. That person is going to use 60% if they have a credit line of $3,000, 60% if they have a credit line of $5,000, of $8,000.

Literally get to see what role does giving people additional credit, like what impact does it have on their lives?

Literally get to see what role does giving people additional credit, like what impact does it have on their lives?

Most of the time, the people who did not get more credit were better off.

Most of the time, the people who did not get more credit were better off.

There's big ways that it happens, like the credit line increases, and then there's a bunch of small ones, right? Like moving the due date from 5 p.m. to midnight or back and forth.

There's big ways that it happens, like the credit line increases, and then there's a bunch of small ones, right? Like moving the due date from 5 p.m. to midnight or back and forth.

Do that on 10 or 15 little things. You're running constant experiments. You're like... Toggling the lights on and off on each one, depending on what the experiments show, is the best way to get that customer into more debt or have them pay a higher interest rate or accrue more fees.

Do that on 10 or 15 little things. You're running constant experiments. You're like... Toggling the lights on and off on each one, depending on what the experiments show, is the best way to get that customer into more debt or have them pay a higher interest rate or accrue more fees.

I'll give an example of something that came up multiple times when I was interviewing people, which is like attending the weddings of friends and family members. If this was 1916, you needed to talk to a community banker and like sign something in paper before that person would hand you a check. Would you be like, excuse me, sir, I want a loan to go to my cousin's wedding? Probably not.

I'll give an example of something that came up multiple times when I was interviewing people, which is like attending the weddings of friends and family members. If this was 1916, you needed to talk to a community banker and like sign something in paper before that person would hand you a check. Would you be like, excuse me, sir, I want a loan to go to my cousin's wedding? Probably not.

But would you put it on a credit card if you weren't completely sure whether you were going to pay it off in full that month or not? Statistically, yes, a lot of people do that, right? And so there's a lot of things in that middle category, which are not pure wants, and also not pure needs. And I think that middle zone is a huge, huge driver of debt.

But would you put it on a credit card if you weren't completely sure whether you were going to pay it off in full that month or not? Statistically, yes, a lot of people do that, right? And so there's a lot of things in that middle category, which are not pure wants, and also not pure needs. And I think that middle zone is a huge, huge driver of debt.

Is your kid literally going to die if they don't get anything for Christmas? Well, no, but is our cultural celebrations like an essential cornerstone of how we derive meaning in this world? Yes.

Is your kid literally going to die if they don't get anything for Christmas? Well, no, but is our cultural celebrations like an essential cornerstone of how we derive meaning in this world? Yes.

I call the debt machine like this system of laws and policies and cultural attitudes that is transferring money from working class and middle class and poor families into the hands of wealthy people.

I call the debt machine like this system of laws and policies and cultural attitudes that is transferring money from working class and middle class and poor families into the hands of wealthy people.