Credit Card Debt Facts
Growing Credit Card Debt
Between 1980 and 2004, consumer revolving debt in the United States exploded from $54 billion to $753 billion. Most of this debt is credit card debt of which only a minuscule one 12th is paid before interest accrues. That means that consumers in the USA, who pay an average interest rate of 12.4 percent annually, pay at least $85 billion in interest payments each year. USA consumers carry an average debt load of $12,000 and hold about nine credit cards per family. These credit card debt facts are according to the Federal Reserve which tracks consumer spending.
Troubling Increase in Lower-Income Debt
One fact which many point to as cause for concern is the amount of debt carried by lower-income consumers. This group saw the sharpest increase in their debt – a whopping 184 percent rise. Another group whose debt spells trouble is what are referred to as Transitioners (those between the ages of 55-64). This group experienced a 47 percent increase in credit card debt between 1992 and 2001. The average debt per family is $4,088. The average family in this group now spends a troublesome 31 percent of their income on debt payments which represents a 10 percent increase over the 10-years period.
A Dangerous Trend
Many financial planners and money experts see trouble ahead if these trends continue and every indication is that they are continuing to increase to shocking levels. Savings rates among USA consumers are at an all time low and this could be attributed to the larger amount of income which is directed toward debt payments. For those on fixed incomes, such as the Transitioners will soon be, many worry whether they will be able to maintain their monthly payments where many are already paying the minimum amount due each month. These credit card debt facts are troubling indeed.
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