Good News, Bad News

Rising Markets, Credit Card Debt & Chinese Economic Collapse

Aug 14, 2022

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So, I recently came across this headline and as someone who used to have eleven (!) credit cards at a time, this was a bit surprising to me. Credit card debt was trending down during the lockdown period, but due to rising inflation, this has reversed, with a recent study showing that it went up by $46 Billion in the second quarter, which is the highest quarterly increase in 20 years.

Now, I am a strong advocate of using credit cards effectively for building your credit score, unlimited cashbacks, and sign-up rewards. I do believe that the increase in credit card debt is mainly due to rising living costs, but another factor is owning a credit card with awful terms and conditions - I went through 100s of credit cards so that you can know which ones to avoid!

Outside of this, if I had to summarize last week, it would be

The latest inflation data showed a 0% month on month increase (still 8.5% overall), suggesting that the worst might be behind us. Equity markets, being forward-looking have also responded in kind with the S&P 500 going up by 3%. However, there seem to be headwinds appearing from the other side of the world.

Worst Credit Cards of 2022*

I have covered some of the best credit cards several times and this week, I went the opposite route and scoured through hundreds of pages of fine print to come up with a list of the top 5 worst credit cards you can get. They are

Starbucks Rewards Visa
Credit One Platinum Visa
Continental Finance MC
Mastercard Black Card
Mastercard Gold Card

These cards can ruin your balance sheet through high APRs, set up/late payment fees, and some of the worst rewards systems I have ever seen. I also suggest some alternatives in the video, in case you were planning to get one of these cards.

China’s economic collapse

China is one of our largest trading partners, but recently, there has been a steady drip of bad news from there. Right now, reports suggest that they might be at the edge of an economic catastrophe - people are withholding mortgage payments leading to a crisis for home developers and a potential real estate bubble.

The banking system is also teetering at the edge due to accusations of corruption, the government stepping in to repay deposits, and a growing fear of bank runs. I rarely cover events outside the United States, so do let me know if you like this.

So that’s it for my Sunday round-up. For the new folks here, in this newsletter, I give a quick recap of whatever you may have missed over the week on Sunday, and on Wednesday, I will be doing my deep-dive article on one of these topics.

See you next week with another bunch of exciting videos!

*Disclaimer - The views expressed here are of the author and do not necessarily reflect the legitimacy of these companies. Do your own research. This is for entertainment purposes only.

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