PeakOil is You
US drivers use credit cards to manage gasoline pain
Re: US drivers use credit cards to manage gasoline pain
by spudbuddy » Wed 24 Aug 2005, 11:49:39
$this->bbcode_second_pass_quote('', 'A')re most Americans *really* stretched that thin? I doubt it.........At least, I HOPE not!
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Perspective:
I remember in November of 2002, I drove from the Canadian border to Iowa, and I had $100 to pay for about a 750-mile trip.
Coming down from Buffalo, I made it all the way into Ohio before I had to gas up. I was driving an Intrepid at the time.
My fuel needle was just touching the red....
I didn't feel too "intrepid" at the pump...but I filled up about 85% of the
tank with a little over $14 worth of gas.
That would be at least $35 now....and I'd run out of money on the same budget.
And that's the point:
My pay raises in the last 3 years would keep pace with about a $17 or $18 fillup.
I think a lot of people out there are in that boat.
Think about the ratio of your weekly pay spent on gas.
In 1974, I bought my first car. It was a 4-cylinder Toyota with a wonky plate over the carburetor that reduced it to a 2-cylinder (which I didn't know at the time)...that resulted in me getting motorcycle gas mileage.
At the time, I could fill that car up for about $4....(in the States it would have been less than $3)....and even with a small tank, I could still get almost 400 miles per tank, including city driving.
(This raises interesting questions about the future of 2-cylinder cars)
however....the "Smart" car notwithstanding....great idea for a single worker going to work alone with a briefcase...
the smart car is basically a glorified motorcyle...can carry no more than your average Harley.
but I digress.................
My point is this:
Back then, I earned about $100/week. I paid about 3 or 4% of my weekly take-home pay on fuel.
If your take-home pay is now $400/week and you spend $50/week on gas (about 350 miles@approx.20mpg...and that's low for a lot of people)
you're spending 15% of your weekly income on fuel.
The pay went up by a factor of 4.
The gas price went up by a factor of 5.
In 1974 I drove about a mile and a half to work.
Lots of people now put over 500 miles on their car every week.
Unless they make real good money, they could be seeing 20% or more of their weeky take home pay going on gas.
As others have mentioned...that's a lot of otherwise disposable income that would have been spent on other things.
Something else to contemplate: The petrochemical industry.
Agribusiness / drugs / plastics / ..........so many things use oil, and their prices will all climb, too.
If you live in suburbia, and your family operates 2 cars, and your lifestyle dictates that 2 adults drive long distances to work every day, plus shopping trips, plus chauffeuring kids....you are locked into a consumption pattern there is no escape from.
About 67% of the North American population lives this way, to some degree.
That is a lot of disposable income disappearing at the pumps.
Picture your average sizeable subdivision spending what amounts to an extra 35k every day at the pumps. That's anywhere from 5 to 10 million dollars annually that isn't going into the local economy.
This money shift will kick our butts for sure (as if they aren't already hoofed around the block.)
The short answer - incomes are not keeping pace with the rising cost of gas. (or any other fossil fuel consumption, for that matter.)
When cheap oil ends, cheap living ends with it.
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spudbuddy - Peat
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Re: US drivers use credit cards to manage gasoline pain
by thorn » Wed 24 Aug 2005, 11:55:52
$this->bbcode_second_pass_quote('Ranglepung', '')$this->bbcode_second_pass_quote('cube', 'B')ingo! I've been using my credit card to buy gas for the past 5 years++ but I pay my credit card bill in full every month. Why do I use plastic? B/C it's much more convienent. I don't have to walk into the store to meet the cashier to exchange cash and with credit you always have exact change.
I'm surprised there are still people out there who buy gas with cash.
I'm surprised there are still people out there who buy gas with cash.
But you are still living a month "behind" if you do this, unless you pay the credit card bill from a savings account which gets a refill with the same amount every month.
But as an aside, isn't debet cards in use at all over there?
People use debit cards in the US, but I think if someone steals your money from the account its your loss.? With a CC, I think you only have to pay $50 if it gets stolen and used? So, the merchant who sold the goods to the person with the stolen CC gets screwed.
I use the CC since I do not have to go to the bank to get cash, just pay one CC bill per month, leave no balance. And like others said getting gas, you do not have to go up to the cashier. I guess it costs the sellers more for CC purchases. Which they just pass the costs on to everyone.
When PO hits only gold will be accepted
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thorn - Lignite
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Re: US drivers use credit cards to manage gasoline pain
by Leanan » Wed 24 Aug 2005, 12:14:05
$this->bbcode_second_pass_quote('', 'P')eople use debit cards in the US, but I think if someone steals your money from the account its your loss.?
It can be, but usually the bank will eventually make it right. The real issue is the hassle in getting it ironed out. It can take weeks or months - a long time to be without your money.
And banks have been known to refuse to repay the money, claiming that it must have been you drawing out the cash. For example, with "white card" fraud, where the crook puts your info on a blank card, and uses it. How do you prove it wasn't you?
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Leanan - News Editor
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