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 shaped 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's 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.