Americanshave created billions of dollars worth of debt over the past 45 years, and credit card debt hasbeen an important part of that. Credit card debt dove -- along with consumerspending -- during the 2008 financial crisis and slow growth has kept totalrevolving debt at pre-crisis levels, though it is creeping up. According tofigures from the Federal Reserve, total U.S. outstanding consumer debt was $3.34trillion as of February 2015.1 That figure includes car loans,student loans and revolving debt, but not mortgages. Total U.S. outstanding revolving debt, whichis chiefly made up of credit card balances, was $884.8 billion as of January 2015.1
Just howmuch credit card debt belongs to the average American depends on how you define credit cards and count the card-carrying population. In search of one number that answers that question,CreditCards.com turned to several reliable sources and came up withmultiple credible numbers. (For more information, see "Average credit card debt statistics.")
$1,098 per card that doesn't carry a balance2$1,648per account, U.S. adults with a credit report and Social Security number3$3,600per person, U.S. resident adults4$5,234per person, excluding unused cards and store cards12$5,596per U.S. adult with a credit card5$5,700per household with credit card debt6$7,743per card that usually carries a balance2The amount of average credit card debt has been steadily increasing over the long term. A person born between 1980 and 1984 has onaverage $5,689 more in credit card debt than his or her parents (those born between 1950 and 1954) at the same stage of life and $8,156 more in credit card debt than his or her grandparents (those born between 1920 and 1924).7
$4,937
?1.8%
West Virginia$4,589
$4,667
?1.7%
Virginia$5,866
$5,964
?1.7%
Largest year-over-year decreases Q2 2013 Q2 2014 Pct. changeArizona$5,349
$5,241
?2.0%
Colorado$5,718
$5,643
?1.3%
Alaska$6,851
$6,765
?1.3%
Transactors versus revolvers
Card issuers divide the world into two groups:"transactors" who use their cards for purchases and pay off thebalances each month; and "revolvers" who carry balances on their cards, payinginterest charges month to month. To pure transactors, the balances on theircards aren't really debts at all, since any purchases will be paid off beforeinterest charges are applied.
The number of revolvers has been decreasing steadily since 2009,when the National Foundation for Credit Counseling first began surveyingAmericans about the issue. In 2014, only about one in three U.S. adults saytheir household carries credit card debt from month to month, down from 44percent in 2009. Some 15 percent of adults -- more than 35 million people -- rollover $2,500 or more in credit card debt each month.10
FUN FACT:
In a March 2013 poll, 85 percent of respondents said they were unlikelyor somewhat unlikely to talk with a stranger about credit card debt -- asubject more taboo than religion, politics, salary and love life details.11
The Credit CARD Act put the brakes on credit card use by college students. Among other provisions, it bans credit card approvals for anyone under 21 years old unless they have an adult co-signer or can prove they have sufficient income to pay the bills. More than twice as many college students in 2013 used debit cards (77 percent) as used credit cards, according to a survey by student loan provider Sallie Mae. Still, students do manage to rack up credit card debt. The average balance among college students in 2013 was $499 and the median was $136.13
By grade level, sophomores carry the lowest average balance and freshmen and seniors carry the highest. But median balances more predictably rise by grade level.13
Average balances also vary depending on the type of school the student attends and the region. The average credit card balance of students attending four-year private colleges in 2013 was $737, compared to $441 for students attending four-year public colleges and $409 for students attending two-year public colleges.
The average credit card balance of students living in the Midwest was $743, higher than those in the South ($494), Northeast ($434) and West ($350).13
Small business credit card debtHalf of small businesses are transactors, according to a May 2012 survey by the National Small Business Association. Among its findings:
50 percent of small business owners said they paid off the balance on their business credit cards every month; 26 percent said they carried a balance of less than $10,000; 15 percent said they carried a balance of $10,000 to $25,000; 9 percent said they carried more than $50,000.14Low- and middle-income families
According to research by the public policy organization Demos, credit cards are often a financial safety net for low- and middle-income households – those whose incomes are between 50 and 120 percent of the local median income. Among those carrying credit card balances for more than three months, 40 percent used the cards for basic necessities such as food, housing and utilities because they did not have enough money in their bank accounts.
Still, in 2012, the average credit card debt among low- and middle-income households carrying credit card debt totaled $7,145, down from $9,887 in 2008.
In a March 2012 survey, Demos looked at the differences between low- and middle-income families who had credit card debt, and those who didn't. Among its findings:
Households in which a member lacked health insurance in the three years before March 2012 were 20 percent more likely to carry credit card debt than households where no one had been uninsured;Those in which someone had been unemployed for two months or more in the three years before March 2012 were 14 percent more likely to carry credit card debt than households where no one was unemployed;Those with children under 18 years of age were 15 percent more likely to carry credit card debt than households with no children;Those without credit card debt reported having savings nearly three times greater than average households with credit card debt;Homeowners with negative equity were 24 percent more likely to carry credit card debt than those without negative equity in their homes.Respondents with a college degree were 22 percent less likely to carry credit card debt than high school graduates;Yet 71 percent of households in debt who paid college expenses for themselves or their spouse between February 2009 and February 2012 said those expenses contributed to credit card debt.15Sources and calculationsFederal Reserve's G.19 report on consumer credit released April 7, 2015Experian; based on a June 2014 sample of credit reports looking at 24 months of payment historyFederal Reserve Bank of New York, based on analysis of Equifax credit reports, second quarter 2014Federal Reserve's G.19 report on consumer credit released Sept. 8, 2014 and U.S. Census population estimate 2013TransUnion; based on credit report sample from Q2 2014; excluding unused cards and store cardsFederal Reserve Survey of Consumer Finances for 2013"New Evidence on Credit Card Borrowing and Repayment Patterns," published in Economic Inquiry, January 2013TransUnion Industry Insights Report, Q1 2014 TransUnion press release Aug. 14, 20122014 Consumer Financial Literacy Survey by the National Foundation for Credit Counseling CreditCards.com poll, conducted March 2013Federal Reserve's G.19 report on consumer credit released Sept. 8, 2014 and U.S. Census estimate of card users, 2013Sallie Mae's 2013 report, "How America Pays for College"National Small Business Association survey conducted May 2012Demos survey on credit card debt of low- and middle-income households conducted in February and March 2012
Updated: April 20, 2015 Join the discussion We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.
Three most recent Research, statistics stories: Poll: Right age to get a card? 22 – Our national survey also finds millennials are conflicted about cards: They think they should have them early, yet one in four doesn't have one ...Fed: February credit card balances down 5 percent – Credit card balances declined once again in February, the Federal Reserve said Tuesday. ...Survey: More cards bid farewell to foreign transaction fees – Consumers looking for a card that won't tack extra fees onto purchases when traveling abroad now have more than 60 cards to choose from, according to CreditCards.com's 2015 foreign transaction fee survey ... CreditCards.com's Newsletter Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now! SUBSCRIBE
ADVERTISEMENT Editorial Policy Follow Us Credit Card Rate Report Updated: 04-21-2015 ADVERTISEMENT Comments/Questions? Corrections Policy Weekly newsletter Get the latest news, advice, articles and tips delivered to your inbox. It's FREE. SUBSCRIBE Quick Links Credit Card Videos Credit Card Help Credit Card Glossary Credit Card Statistics Home Privacy Policy California Privacy Rights Home Site Security Privacy Policy California Privacy Rights Site Map FAQs About Us Overview Leadership Team Media Center Careers Contact Us Customer Support Partnership Opportunities Business Development Media Relations Related Sites Credit Card Blogs WalletUp™ CardMatch™ International Sites Tarjetas de Credito UK Credit Cards Brazilian Credit Cards Canadian Credit Cards Copyright 2015 CreditCards.com. All Rights Reserved.
No comments:
Post a Comment