Five Shocking Credit Card Debt

Need a little motivation to get out of debt? Interested in how your debt levels compare with the average American? We’ve researched the Federal Reserve Board statistics to provide you with some perspective:

1. How much credit card debt does the US carry?
At the end of 2007, there was $972,494,000,000 in outstanding revolving debt in the United States. This number includes credit card debts held by commercial banks, credit unions, finance companies and securitized debt balances. (Source: Federal Reserve)

2. How has America’s debt balances changed over time?
From 1997 to 2007, America’s credit card debt balances increased 75%:

2007 - $972 billion (7.7% increase)
2006 - $902 billion (6.2% increase)
2005 - $849 billion (3% increase)
2004 - $823 billion (4% increase)
2003 - $791 billion (2.8% increase)
2002 - $769 billion (4.4% increase)
2001 - $736 billion (4.8% increase)
2000 - $702 billion (12% increase)
1999 - $627 billion (5% increase)
1998 - $597 billion (7.5% increase)
1997 - $555 billion

And there were major increases in the previous decades:

1987 - $169 billion
1977 - $39 billion
1967 - $1.4 billion
(Source: Federal Reserve)

3. How much credit card debt does the average person have?
"As with installment borrowing, the carrying of credit card balances is widespread but notably lower among the highest and lowest income groups, the highest wealth group, and families headed by persons who are aged 65 or older or are retired.40 From 2001 to 2004, the proportion of families carrying a balance rose 1.8 percentage points, to 46.2 percent. The preceding three years had seen a much smaller increase in use. The recent increase was shared by most demographic groups; the proportion carrying a balance declined for the lowest two income groups, the lowest wealth group, the youngest age group, nonwhite or Hispanic families, and renters.

Overall, the median balance for those carrying a balance rose 10.0 percent, to $2,200; the mean rose 15.9 percent, to $5,100. Over the preceding three years, the median had been little changed, but the mean had fallen 8.3 percent. In the recent period, the median balance rose strongly for most demographic groups; but borrowing declined notably for the lowest and next-to-highest income groups and for the youngest age group.

Many families with credit cards do not carry balances. 41 Of the 74.9 percent of families with credit cards in 2004, only 58.0 percent had a balance at the time of the interview; in 2001, 76.2 percent had cards, and 55.4 percent of these families had an outstanding balance on them.”
(Source: 2004 Federal Reserve Survey of Consumer Finances)

4. What percentage of an average consumer’s income goes to their credit card debt?
The median household income in the US is around $43,200, so that puts this level of credit card debt as between 5% to 12% of their annual income.
(Source: Federal Reserve)

5. How much are American consumers paying on their credit card debts?
Someone with a $5,000 balance with a 16% APR who makes a $125 payment each month would need 4.8 years and $2,000 in interest to pay off the balance.

With the same balance and payment and a high 25% APR, the debt would take over 7 years and $5,800 in interest to repay.

With the same balance and payment and a low 9% APR, the debt would take 4 years and $966 in interest to repay.

Now that you’ve seen the numbers, are you ready to get serious about your debt? Request a free debt consultation online.