Statistics about Consumer Debt
The latest statistics from the Federal Reserve indicate that the total amount of consumer debt outstanding remained fairly steady in 2009. In case you’re wondering the total amount of consumer debt in the United States stands at nearly $2.5 trillion dollars – and based on the latest Census statistics, that works out to be nearly $8,100 in debt for every man, woman and child that lives here in the US.
And if you’re saying to yourself – that that statistic doesn’t seem quite so bad – just keep this in mind: We’re talking about consumer credit – which does not include debt secured by real estate. So if you’re thinking that number has mortgage values in it, it doesn’t.
Consumer Credit Breakdown
So just how does that debt breakdown in terms of credit cards and /or the purchase of a new automobile? Well, roughly 36% of all consumer debt – as of November 2009 - of this type is what is termed revolving credit, which is defined as credit which is repeatedly available as periodic repayments are made. The most common type of revolving credit would be credit card debt.
The other 64% of that debt is derived from loans that are not revolving in nature. This type of debt would include automobile loans, student loans, and loans on boats, trailers or even vacations. In fact, these statistics also tell us that the average new car loan is over $30,400 and the loan to value ratio is 91%. That means new car buyers are using down payments of around 9% of the car’s purchase price.
Credit Card Debt
According to information gathered by the US Census bureau, there were approximately 173 million credit card holders in the United States in 2006 and that number is projected to grow to 181 million Americans by 2010. These same Americans own approximately 1.5 billion cards – an average of nearly nine credit cards issued per credit card holder.
In addition, Americans charged approximately $1,950 billion dollars to their credit cards in 2006 – that’s just over $11,300 in charges per cardholder. This information includes all credit card types including bank cards, phone cars, as well as credit cards issued by oil companies and retail store.
This data also tells us that Americans carried approximately $886 billion in credit card debt and that number is expected to grow to a projected $1,177 billion by the year 2010. This works out to over $5,100 in credit card debt per cardholder (not household) and that number is expected to increase to over $6,500 by 2010.
You can find more information on this topic in our article on credit card debt statistics.
Bankruptcy and Consumer Debt
In January 2008, the American Bankers Associated reported the percentage of credit card accounts that were 30 or more days past due dipped slightly to 4.18% in the fourth quarter of 2007. That’s good news because it means more consumers are paying their bills on time.
But even with this decline in late payments, credit card delinquencies were at the third highest level on record. To James Chessen, ABA’s chief economist, that can signal financial distress and he attributes this distress to the rise in gasoline prices as well as rising interest rates.
Bankruptcy Filings in 2005 / 2006
Despite the Fed’s feelings about consumer credit, the bankruptcy law changes that were instituted last fall resulted in a rush of indebted consumers to file for bankruptcy in 2005. That rush pushed personal bankruptcy filings to their highest levels on record – with estimates in excess of 2 million filings.
In fact, according to Lundquist Consulting, a research company based in California, there were 200,732 bankruptcy filings in the second quarter of 2007. That’s an increase of over 11.6% from the filings recorded in the first quarter of 2007. On an annualized basis, and using Census statistics on the number of households that mean nearly one in every 35 households in the United States filed for bankruptcy in 2007.
So that leaves it up to you to think about this question – Is the growth of consumer debt really a concern in America?
Source: http://www.money-zine.com/Financial-Planning/Debt-Consolidation/Consumer-Debt-Statistics/
