Well, according to a recent survey from the Federal Reserve Bank of Philadelphia,
the
share of Americans paying their credit card balance late is on the rise.
So here to explain more about what it means for the economy. And for us
is Michael Hirschfield, founder and CEO of a crew, Michael. Welcome.
Thanks for having me.
Perfect timing on this segment because we got that fed decision tomorrow.
That two day meeting starting today. What is the status of
for Americans?
The reality is that many Americans are dealing with credit card debt over a
trillion dollars of credit card debt in the United States
and with rising with interest rates so high,
that's a real pain on the average American consumer.
So we're seeing a real key shape economy.
So many Americans feel good. You see
wage
inflation has gone up, which has been amazing.
There's still real pain for the average American consumer with credit card debt.
So how can a consumer use your services at
a crew to help them better manage their finances?
So we partner with merchants to offer a
debit saving solution to retail to consumers.
You know, for 30 years, Americans have seen credit options buy.
Now pay later, co branded credit cards offered to them to buy.
Now,
I really believe that for many Americans they want to
save 30 plus percent of Americans are saving for travel.
Right now, 60% of Americans are actively saving for cars,
a pair of shoes and there really hasn't
been a offering that merchants offer them that's not
credit and that's what we do at partnering
with retailers to offer that solution to consumers.
So what should consumers be looking for when the fed gives its decision tomorrow?
What key clues, words,
terminology could give them an indication as to
where these fees and these rates are going.
My hope is that interest rates will go down a little bit.
I mean, when you look at American Consumer Psychology,
you see that debt particularly
makes people struggle.
They have real mental health issues around debt.
So my hope is that there's going to be a drop of interest rates here,
a potential drop in the interest rate to give consumers a little
bit of a slack because we feel that pain delinquencies have risen.
I don't know if we saw recently,
we saw that with capital one, there is a rise of delinquency rates
for the average American consumer.
This is a signal that some Americans are really struggling and some of them
really want to save up for things and not use credit to make purchases.
What advice would you give to an American who is struggling with credit card debt and
how to take control, right? Your help.
Your company is trying to help them take control of that.
But for anyone who is struggling in the
initial phases from those mental health challenges,
what would you say to them to encourage them to use a product like yours?
It's a really special time.
The rise of fin talk,
the rise of loud budgeting has made it ok to talk about people's finances, right?
And clearly like companies like us were the
first ever savings wallet offered by retailers.
There's a wave of empathy that is really taking shape in the US economy.
It's not just about spending right now and getting one right now.
So first off, we have to start with
empathy and reality is American consumers, you know,
look at their credit card debt and say what do I, what do I need to pay right now?
At least pay down your minimum every single month.
Very, very, very, very important. How does this impact broader financial goals?
Right?
Like your credit score or the ability to buy a house even perhaps get an auto loan?
Yeah,
I mean short term consumer credit is painful right now
for the average American's interest rates are so high,
you know, if you're 2025 they are almost 30% in interest rates for your credit card.
That's very painful for you if you can't make payment.
And so you have to be really careful to
make sure that you're spending on your essentials.
So for every month, Americans need to look at their budget and say,
am I spending on what I need right now versus
what I just need to push off for another month,
really important to be conscious about your spending.
And I think we're really in a special time with
budgeting with finto
this empowerment of knowing what matters for your family.
So we have seen inflation come down a bit but still above technically,
the fed's long term 2% target wage gains by and large have been rising.
But probably not every American per se
has felt that and we've seen layoffs this year in terms of the path forward.
Do you expect it to get easier or harder for
those who are trying to manage their debt right now?
My hope is it's going to get a little easier.
It's going to take some time obviously,
because inflation still is a pain in the American economy.
So it's going to take some time before interest rates start to drop in my opinion.
And
this is where there is the consciousness that the average American student needs
to be around their spending to make sure they're spending on things they need
versus stretching themselves in credit card debt, potentially with auto loan debt
because of the rise in delinquencies.
They have to be more conscious of how they're spending their money.
How long does credit card debt, follow someone
for years. It could be for decades.
It's hard to chase when we think about student loan debt,
auto loan debt reality is that our debt travels with us and
if we're unable to pay it,
we have to find every excuse
to work through it,
to partner with potentially with your credit companies to make
sure you pay down things at the right time.
It sounds like right there is hope, right?
So we're seeing inflation come down as we mentioned.
And on top of that, borrowing costs expected to come down as well.
So hopefully some relief for the everyday American
is on the horizon. And that that in turn, what I'm sure benefit the stock market.
I'm no stock market expert.
I can tell you just obviously, in my opinion, obviously, we're an early,
we're a company that's raised almost $4
million tremendous support a cru savings had.
I think retailers are starting to realize that
just offering buy now pay later and just
offering co branded credit cards may not be in the best sense of their business,
but most importantly in the business of the consumer.
So we think like that hope that hope that merchants can offer a diverse
payment option is really where things could go in the next few years.
Do you see different trends across generations?
For instance that Gen Z millennials, baby boomers,
Gen X that they have different needs?
Well,
there's no question. Sorry for interrupting. There's no question
that
American Gen
Z and millennials have more credit diversion.
I mean, yes,
we've seen a little signal of millennials
getting more comfortable with credit options,
but there's a real move for Gen Z
and millennials to be more sensitive of how they
spend their money and really avoiding traditional credit cards.
And that's another interesting signal as we look forward to the future.
Good to talk about it. Right.
So
liberating, it feels fun. Things are changing. Yeah.
Yeah. And hopefully for the best.
So Michael, we appreciate the work that you're doing.
Thanks. That's Michael
Hirschfield CEO and founder of a crew. Thank you.