Credit Card Debt Statistics

At one time, Georgetown University ran a Credit Research Center that published arguably some of the best credit card research available at that time. In their March 2002 publication on credit card debt, they published some eye-opening statistics.

This work was done in collaboration with the National Foundation for Credit Counseling. This organization specializes in supplying quality credit counselors for those in need throughout the United States. The Credit Research Center also had access to information supplied by TransUnion, one of the largest credit reporting agencies in the world.

While 2002 may seem like old material, these research efforts are multi-year undertakings that involve following the habits of thousands of individuals. Funding and fielding these studies is a time-intensive undertaking. Summarizing some of the information collected from that study:

• Roughly 2.0 to 2.5 million Americans seek the help of a credit counselor each year, mostly to avoid bankruptcy.

• From 1990 to 2000, the number of Americans seeking the help of a credit counselor doubled.

• In two thirds of the counseling cases, the individual is referred to a household budget counselor, financial advisor or a social worker.

• Many individuals facing financial difficulties have experienced a job loss, an interruption to their income due to illness, or a divorce / separation.

• Nearly 75% of those seeking help from a credit counselor held a credit card.

• The average person seeking a credit counselor carries a balance on two credit cards.

• The average client seeking the help of a counselor had $43,000 in debt, of which $20,000 was consumer debt and $8,500 was revolving debt.

Credit Cards and College Students

In that same year, the Research Center published information on the use of credit cards by college students, including:

• College students carried an average of $552 in credit card debt, while young adults in the same age brackets carried an average balance of $1,465.

• The average amount of credit extended to students was $1,395, which was considerably less than the $3,581 in credit obtained by young adults (non-students) of the same age. The average adult was able to obtain nearly $7,500 in credit.

• College students are more likely to pay off their credit card balance than any other demographic group studied.

• While students are much more likely to pay off their credit card balances, they tend to pay late and exceed their credit limits more frequently than other groups, and therefore incur more fees.

The Federal Reserve is a very good source of credit card and other debt statistics. Current data gathered by this U.S. government agency includes:

• The size of the total consumer debt grew nearly five times in size from 1980 ($355 billion) to 2001 ($1.7 trillion). As of August 2020, consumer debt totaled $4.15 trillion.

• The 128 million households in the United States had $985 billion in revolving credit (primarily credit cards), averaging $7,660 per household as of August 2020.

According to the latest information gathered by the U.S. Census Bureau, there were 156 million credit card holders in the United States in 2009, and that number was projected to remain steady through 2011. These same Americans own approximately 1.2 billion cards, which is an average of eight credit cards issued per credit card holder.

Americans charged approximately $1.9 trillion to their credit cards in 2009. That works out to $12,500 in charges each year per cardholder. This information includes all credit card types such as bank cards, phone cards, as well as credit cards issued by oil companies and retail stores.

Finally, this data tells us that Americans carried approximately $886 billion in credit card debt, and that number was projected to shrink to $838 billion by the end of 2011. This works out to approximately $5,400 in credit card debt per cardholder (not household, as mentioned in the Federal Reserve statistics cited earlier).

The 2012 American Community Survey (ACS) published by the U.S. Census Bureau includes population, demographic, as well as housing estimates. The 2012 survey indicates the following concerning mortgages in the United States:

• Approximately 65.7% of homes that are occupied by their owners have a mortgage.

• Of those homeowners with a mortgage, 25.8% of those households use 35% or more of their household income to pay money owed on their mortgage each month.

• The median mortgage payment (mid-range of the data) was $1,460 per month.

The Federal Reserve also reports what is called the household debt service ratio, or DSR. This measure provides insights into the ratio of all debt payments to disposable income. Unlike payments to credit cards, this statistic measures the debt load associated with basic living expenses such as owning a car and home. As of the second quarter of 2020, consumers spend roughly 8.69% of their disposable, after-tax income, to pay their mortgage obligations, personal loans and car loans. The financial obligations ratio (FOR) measures the amount of consumer debt in the DSR, but adds to this measure expenses such as car lease payments, rental properties, property taxes and homeowner's insurance. As of the second quarter of 2020, this financial obligations ratio stood at 13.64% for homeowners and renters (national data). In other words, the typical homeowner spends around 14% of their disposable income just to own their homes and cars, while renters historically spend nearly 24% of their income on these same costs each month.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires government agencies to compile statistics on individual debtors seeking bankruptcy protection. According to the year-end 2019 report:

• There were 764 thousand individual bankruptcy filings in the United States in 2019.

• The average monthly income of all debtors was $2,692, while the average reported expenses were $2,840 in 2019.

• The average assets held by individuals seeking Chapter 7 bankruptcy was $146,000, while the average debt was $132,000 in 2019.

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