US Credit Card Debt Stats

Aug 22, 2012 by Kurt

Numbers nerds like me enjoy browsing Statistics Brain. Here’s a chart I found recently:

Data from the U.S. Federal Reserve, verified by Statistics Brain on 24 July 2012

My observations:

• The U.S. economy is about $15 trillion. So total credit card debt of $793 billion is a bit more than 5% of the U.S. economy. You may have noticed in the news earlier this year that total debt in the U.S. now exceeds the annual value of the economy.
• The average credit card debt by household of $15,799 clearly is skewed by a relatively few in number, very large balances, since only 15% of cardholders have a balance over $10,000. (When I worked as a credit counselor, I routinely had clients with credit card debt of $30-$50,000. The highest I saw was $120,000!)
• That 56% of cardholders carry an unpaid balance is distressing, but I guess not surprising. I hate to think of all the money that’s being wasted on credit card interest instead of helping a family succeed.
• Also possibly alarming to me is that 14% of disposable income goes to service credit card debt. I couldn’t find Statistic Brain’s definition of “service;” I presume it does not mean interest alone. Still, cardholders are spending 14% of their income through a credit card. Even if you intend to pay it off every month, that feels risky to me.
• 90% of cardholders believe they had the same as or less debt than the average. Though that at first may seem like self-deception, it could be true because, as noted above, the average reflects the very large balances of a relatively few number of cardholders. Now if 90% of cardholders believed their debt was less than the median, that would be delusion.

What Strikes You as Most Revealing or Surprising?

Are you especially surprised by any of these statistics? In sum, would you say the picture painted of the U.S. credit card holder bodes ill or well for consumers’ prospects and the economy?

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