Facts on Consumer Debt
Many people find it astounding when they realize just how much this nation is in debt. The following facts on consumer debt should give everyone a wake up call on how easy it is to fall behind on their monthly payments and, eventually, fall helplessly into credit card debt.
- The average American with a credit file is responsible for $16,635 in debt, excluding mortages, according to Experian. (Source: U.S. News and World Report, "The End of Credit Card Consumerism," August 2008)
- Total U.S. consumer debt (which includes credit card debt and non-credit card debt but not mortgage debt) reached $2.55 trillion at the end of 2007, up from $2.42 trillion at the end of 2006. (Source: The Nilson Report)
- Total U.S. consumer revolving debt reached $962 billion in May 2008, up from $879 billion at the end of 2006. About 98 percent of that debt was credit card debt. (Source: Federal Reserve)
- Of the households that do owe money on credit cards, the median balance was $2,200 -- meaning half owe more, half less. (Source: Federal Reserve Board survey of consumer finances, 2004)
- Only 8.3 percent of households owe $9,000 or more on their credit cards. (Source: Federal Reserve Board survey of consumer finances, 2004)
- National average credit card debt per credit card borrower is $1,673. (Source: TransUnion, June 2008)
- About 40 percent of credit cardholders carry a balance of less than $1,000. About 15 percent are far less conservative in their use of credit cards and have total card balances in excess of $10,000. When you look at the total of all credit obligations combined (except mortgage loans), 48 percent of consumers carry less than $5,000 of debt. This includes all credit cards, lines of credit and loans -- everything but mortgages. Nearly 37 percent carry more than $10,000 of nonmortgage debt as reported to the credit bureaus. (Source: myfico.com)
- The typical consumer has access to approximately $19,000 on all credit cards combined. More than half of all people with credit cards are using less than 30 percent of their total credit card limit. Just over one in seven is using 80 percent or more of their credit card limit. (Source: myfico.com)
- More than 90 percent of survey respondents believe they had the same amount -- or less -- debt as the average American. (Source: CreditCards.com survey, June 2007)
- 28 percent of those surveyed say their ability to pay off their credit card balance has become more difficult. (Source: Javelin Strategy & Research, "Credit Card Issuer Profitability in a Difficult Economy," July 2008)
Consumer Debt and the Future
We’re passing on this legacy to our youth. As young adults enter the “real” world, they’re falling into the same debt trap as their parents, accruing large amounts of credit card debt to pay for college and other related expenses. Here are the facts on how consumer debt is affecting our youth:
- 76 percent of undergraduates have credit cards, and the average undergrad has $2,200 in credit card debt. Additionally, they will amass almost $20,000 in student debt. (Source: Nellie Mae, "Undergraduate Students and Credit Cards in 2004: An Analysis of Usage Rates and Trends.")
- Average credit card debt among indebted young adults increased by 55 percent between 1992 and 2001, to $4,088. (Source: "Generation Broke: Growth of Debt Among Young Americans")
- The average credit card indebted young adult household now spends nearly 24 percent of its income on debt payments, four percentage points more, on average, than young adults did in 1992. (Source: "Generation Broke: Growth of Debt Among Young Americans")
- The average college graduate has nearly $20,000 in debt; average credit card debt has increased 47 percent between 1989 and 2004 for 25-to 34-year-olds and 11 percent for 18-to 24-year olds. Nearly one in five 18-to 24-year-olds is in "debt hardship," up from 12 percent in 1989. (Source: Demos.org, "The Economic State of Young America," May 2008)
Have these facts on consumer debt shocked you? Do you want to make a change in your personal finances and stop depending on credit cards? Call 1-800-320-9929 to speak with a certified credit counselor at Consolidated Credit Counseling Services. We can look at your budget and advise you on the best way to get out of credit card debt. Don’t become a statistic. Start on the path to living debt free!
Source: Creditcards.com
