Credit card debt statistics - March 13, 2008
Credit cards are very common today. But how common are the really?
Depending on which figures you believe the average family in the USA carries a balance of between $5,000 and $8,000 on all of their credit cards. Every year an amount of over $1,000 per family goes into interest! And that’s just the average…
Overall Americans spend over $1 trillion every year on their credit cards. And they owe more than $500 billion of it. If debt continues to grow at the current rate then one in hundred families will be forced into bankruptcy. Paying back debts eats up over 90% of Americans’ disposable incomes.
Debt costs everyone money!
Billions of dollars are being used up on expenses only created because of the existence of credit cards. The costs of the calculations, administration and marketing needed to support this industry is gigantic. Resulting in one credit card offer in the mail every day for the average American.
And these costs exist before taking into account the burden of private bankruptcies put on the court system or the cost to the government for providing subsidized debt counseling. Another thing to note is that economy gets hurt if the money isn’t flowing. And consumers with more debt have less to spend! There are very few industries are not hurt by debt in the long run.
Debt is much more common than it used to be!
A not so long time ago having just a little was considered to be absolutely terrible. You had to save up if you wanted something. Having a bad credit disqualified to get a credit card at all. If you go back fifty years consumers debt was absurdly low just like today in most of the non-Western world.
But today in the West the art of saving seems to be a lost one. Saving for retirement is almost a no-go and banks have to offer ever-higher interest rates to get people to put there money anywhere near a savings account. In todays “I want it now” consumer culture we are willing to pay more than we can afford to fund our lifestyles.
Spending isn’t to blame!
Don’t think you are in debt because you didn’t spend your money cautiously enough! Getting into debt because of all too bad spending habits is very rare for people according to statistics. Loosing their job or getting sick and then paying with credit cards for basic expenses is a lot more common. Once fallen into the interest trap their debt spirals out of control from just a few thousand dollars borrowed to pay for essentials.
Most people still have a reasonable sense of what is affordable for them and won’t buy things with credit cards they would not be able to pay for otherwise. The problem is just leaving the balances on credit cards for too long and not taking into account how high the interest really is.
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