Average credit card debt?

[Sprayaway Fox]

I was bored and looked up average credit card debt on a couple of sites at its around 15K on the webz to me that seems pretty crazy! Is that about right you think?!

[Car Guy]

Crazy = reality for many people. I was easily 50k-ish only a few years ago, now ZERO......

[Prince Valiant]

Are you talking the CC debt people are carrying? Or that they accumulate in the course of a year w/o regard to whether they pay it off or not?

My wife and I probably do 90% of our transactions using credit cards, and yes, we probably spend around 15G in a year (though not this year, for certain). Never have carried a month to month debt though, always paid in full at the end of the month.

[Crawlin]

According to the thousands of credit reports I've pulled in my years at the car dealerships, I'd say that's a bit low. Most reports pulled have about a 65-75k total LIMIT with a balance running of 25-30k. Now who knows like Chris said how much of that is carried balance month to month. I'm sure that varies based on location though.

I have seen alot higher balances, and i've seen 100k limits with zero balances

I'm talking an average age group of 30-65 though, count all the youngsters with their 1 or 2 $500 limit card and it throws the reality off.

[Car Guy]

Are you talking the CC debt people are carrying? Or that they accumulate in the course of a year w/o regard to whether they pay it off or not?

My assumption is the amount carried on a regular basis......

[Prince Valiant]

about a 65-75k total LIMIT with a balance running of 25-30k.Here's a question: How many people (%-wise) end up going through the dealer for loans, come in with loans, or simply write a check for their cars?

[BoosTT]

That's insane. I've never not paid in full.... ever!

[Crawlin]

I think it was 75% finance with us, 15% come in with an outside financed check, and the remaining 10% are writing checks. Those writing checks (for the MOST part) are at the extreme ends of the spectrums though. They are either bringing in a certified check for a $3500-5000 budget car, or they are writing them for the 50,000+ cars. Hardly anyone was writing a check for a 20,000-30,000 car

Got to remember though, it was MY job to make sure they financed with us so we could make money on that aspect

Alot of the financing with us is the 0% deals or the incentivised rates for certified used cars, etc.. so that number will always be skewed.

[Crawlin]

That's insane. I've never not paid in full.... ever!

what's funny about that is TRANSUNION themselves even say when you get your report, if you have ok credit, it can be better if you reduce your balance. if you have EXCELLENT CREDIT, your score can dip BECAUSE you DO NOT have a balance

weird huh?

[Korndogg]

Yeah my score actually went down when I paid off all of my cards. Then when I got new appliances for the house and used the card, my score went back up lol.

[michelle]

I've never carried a balance, but it doesn't surprise me that $15k is the average. I would actually think the average has increased over the last few years compared to what it was 10 years ago.

[Car Guy]

I'm curious about a comparison to 5 years ago when many more people had money trees growing in their back yard.....

[Prince Valiant]

I would actually think the average has increased over the last few years compared to what it was 10 years ago.Usually in a slow-down of an economy, people (as well as companies) tend to pay down debt and not take on new spending. That said, this is all debts, and not necessarily credit card debts.

I would still think it's gone down overall though simply because FAR less credit has been issued since 08. Many credit card companies/banks have simply reduced the credit line (sometimes keeping the credit limit below the balance to ensure no new spending is used with the card). Many customers have been dropped.

BUT, to dig a little deeper, I looked at US census figures:

In 2000: Total debt = 680 billion dollars/159 million cardholders (which doesn't differentiate b/w households of which it can be or individuals) gives us an average debt in 2000 of 4,276 dollars of debt per cardholder (not per card).

In 2009: Total debt = 886 billion/156 million cardholders = 5,679 dollars.

Projected for 2012= 880 billion/160 million = Projected per cardholder debt of 5500 dollars.

So they project that the debt decreases, albeit minimally.

http://www.census.gov/compendia/statab/2012/tables/12s1188.pdf

That said, this doesn't match the numbers that were seen on several websites...and I have a clue why:

1) Again, we don't know if we're comparing the same number. Per cardholder? Per household? What's the average number of actual "cardholders" are per household? (is my wife counted with me since we share accounts, or separate?)

2. Many of the websites that pop up if you do a simple credit+card+debt+average seem to be simply credit counseling services...and the numbers they use seem wholly made up (though I did see one paper cite a similar number though there was no citation on where the number was sourced, much like many of these counseling sites that show a like amount).

A fairly reputable source, forbes puts the average household as carrying ~ 9,700+ per household in the worst city for credit card debt (Miami FL). So if that's among the worst average nationally, I would think the actual number per household nationally is probably around 8,500-9,500 or so.

http://www.forbes.com/2009/05/20/american-consumers-overspending-lifestyle-real-estate-credit-card-debt.html

Interestingly Forbes uses hard total numbers from the fed, and they come with decreasing total debt by the billions...despite the real possibility of there being "more cardholders" as population growth and aging occurs. This points to people spending less and paying down debts during economic slowdowns (though certainly some DO go deeper in CC debt during thin times when they're laid off or what not, on the whole, most don't).

It just seems that there aren't REAL strong sources out there, and this should also show that people can often talk about the same thing, but in different terms, and create vastly different impressions.

[Crawlin]

well, can look at it two ways...

NOW -

people don't have huge amounts of money yet still want the finer things they haven't worked for yet, so they carry a higher balance


5 years ago -

people have a larger supply of money so they want things bigger than what they would have normally got, so they carry a higher balance


whether it is 5 years ago or today, there are still two types of people, those that are financially responsible and those that aren't.

EDIT - i like the hobby of modifying cars/bikes(or was before school) so I'm gonna consider myself as those that aren't financially responsible, haha

[pOrk]

Its amazing how much debt a lot of people have, 15 GRAND on a credit card? HOLY BALLS

I pay every up every month as I do MOST of my spending via credit card, but carry a 0 balance.

[Crawlin]

when i worked in brookfield, you'd be amazed at how many people had 100k jobs each spouse, but had a boat loan, rv loan, motorcycle loan, two cars loans, 2500 mortgage, and 100k in credit card debt. and even with a 700 credit score still, could NOT get a new car, even though it replaced one of the car loans and even at a lower payment and even with the SAME bank.

[05caddyext]

Credit runs the world.

[Sprayaway Fox]

Im redoing my kitchen and I have about 1800 bucks to pay down now and I can see how these things can get out of hand. My card gives me up to 10G's to spend and there is now way in hell I would be like screw it and spend that kind of money with a credit card.

If it seems like thats the normal debt limit, I couldnt imagine the payment needed every month.

[05caddyext]

Depending on the interest rate the payment would be about $250 a month, minimum.

[WhatsADSM]

Yea i would assume that with the 3rd party statistics it includes those that pay to zero every month. Smart thing for consumers to do but not exactly "debt".

I would agree though it probably boils down to the two types of people as Crawlin points out. Debt isn't so much about how much you make, but more about how you spend.

[-stew-]

I am currently $27 dollars in credit card debt.

[michelle]

I am currently $27 dollars in credit card debt.

Disappoint.

[Neal Steffek]

Am I the only one who doesn't use credit cards? I use my debit card for everything, if I don't have the money for it, I don't buy it. The last few cars I purchased was also in cash.

[pOrk]

Am I the only one who doesn't use credit cards? I use my debit card for everything, if I don't have the money for it, I don't buy it. The last few cars I purchased was also in cash.

Probably, very little protection with a debit card not to mention you dont get POINTS! I don't think anyways, I prefer to use Credit Card and pay to 0, get points and can cancel any transaction that doesn't go your way with little effort.

[GHOSST]

Screw credit cards, never had one, never will. I do have a retail store card, for the military exchange, and even that one can be a headache, shows me enough!

[indyzmike]

I use my credit card for most things because of the security, like PORK said. I pay off the credit card bill every month.

[johnny--2k]

I would say crawlin is on the money there, as I did the same thing as him. Seeing that stuff regularly. I myself have some CC's that I dont pay in full mainly because they are 0% or super low rates (like fixed under 5%) so I milk it for what it's worth. Even with the debt I do have, it doesnt hurt much with the limits I have which after looking at them is just assinine!

[Wagonbacker9]

I typically don't carry a balance, but buying shit for the house and whatnot has run me up to about $2500 (I believe in total I have about 10K of authorized limites between my CC & store cards). I seriously don't know how people sleep at night with that much debt. Tax time will hopefully put me back to 0 balance and leave me some "fun money". I also have the added benefit of a lower rate than your average card... only paying 9%, and I only buy 0% on store cards.

[WickedSix]

highest i've carried was ~6500 when I graduated in 2009 and it took awhile to find an Engineering job. I use the CC all the time for the same reasons pork listed. Doesn't seem like a bad deal to get $50 in rewards gift cards every month and pay no interest because you pay off the balance. plus, to me, its a necessary evil to have CC's in order to establish credit...... it was a major pita when I needed my first education loan with no credit history. Paying cash for everything is great if you can do it, but some purchases require using your credit, a new vehicle, first home...etc. If you are responsible with a card and don't carry an unmanageable debt load they work for you instead of against you.

[twicks69]

I use my credit card on every physical item I purchase on a daily basis as it is a cash back card. I carry a zero balance on it and haven't paid a dime of interest in the last 3 years. Since I use it for business also, I have made quite a bit of cash back on it annually as I normally spend around $20-40K/mo, and there is no limit to how much cash rewards money I make or redeem.

I would suggest a cash back rewards card for anyone that can zero balance it or pay your prior billing cycle in full to not get charged interest. My best one is my Discover cash back rewards (my specific one is more cash back on auto parts and gasoline also, so it does very nicely for me!). Look for one with no annual fees and no cash back limitations, and equal point per dollar rewards. I say this only because AMEX will give you $1.00 cash per $200 spent (0.5% rewards), while 1% rewards on gift card redemptions = lame. My card originally started out at 5% cashback and went down to 3% after a year and all "non-bonus" rewards is 1% on all purchases. I also get equal cash back for direct cash, bill credits, gift cards, etc.

As for total average debt, I was expecting the general consensus to be around $12-15K average per household on cards.

[Wagonbacker9]

So, 15K at 20% interest, you're paying 3K a year just so you can have shit you can't afford. Thats f'n stupid.

[PureSound15]

I'd say out of the 100+ credit reports and PFS I'm looking at in a week - credit card debt is much lower now across the board than it was 2 years ago. Of course that follows the major shift from average consumer "saving" per year being a negative and it now trending to a positive. Of course the saving went up and leveraging went down as a result as people began to pay off their debt.

In my opinion I'd say that middle class unsecured debt has gone down to an average of about 10K for a married couple. The quasi consumer version of Economies of scale suggest it's to be expected for unsecured debt in high income homes to be a bit more and that's apparent all the time; but I'd say that CC debt for high income homes hasn't changed at all.

As we speak I have an attorney's credit report on my desk - $123,304 in CC debt :)

[johnny--2k]

Thats crazy!!! It seems like a lot of times people who have lots of money, are poor at managing it. I have a healty amount of debt but damn!

[Al]

My wife and I probably do 90% of our transactions using credit cards, and yes, we probably spend around 15G in a year (though not this year, for certain). Never have carried a month to month debt though, always paid in full at the end of the month.

Sounds like me as of the beginning of the summer. I pay my card down to zero each month. I've also noticed that the interest rate on my card went from %29 down to %19. I think they want me to pay back some interest. Also, all of the payback stuff adds up to about %3-4 back each month...then you get the points to play with.

The Goal: good credit for buying a house.


what's funny about that is TRANSUNION themselves even say when you get your report, if you have ok credit, it can be better if you reduce your balance. if you have EXCELLENT CREDIT, your score can dip BECAUSE you DO NOT have a balance

weird huh?

Well, that is why I am in no rush to pay off my 2.9% student loans with auto pay. Once I factor in inflation, it looks even better.

[Crawlin]

Thats crazy!!! It seems like a lot of times people who have lots of money, are poor at managing it. I have a healty amount of debt but damn!

No, they just assume that the money train will never end so just constantly spend and spend. I'd still bet they have a decent chunk of savings/retirement but just want all those things that they went all those years of school to obtain.

Then the money train ends/changes and you get shortsales in Legends of Brandybrook or Bristlecone Pines. Dad's banker called him since he knew my parents were looking at new houses. Said they just foreclosed on two 1.0-1.3 million dollar properties. Now that's out of my parent's range, but just think about that. At one point you had money coming in to afford a house like that, and then WOOSH it's all gone. Just their mortgage payment total for 1 year was probably more than what 75% of the people on this board bring in for the whole year.

[wrath]

The more you make, the more you spend. It's sad, really. Five years ago I made less than what I spend on my student loans and house payment each month.

[BoosTT]

The more you make, the more you spend. It's sad, really. Five years ago I made less than what I spend on my student loans and house payment each month.

This is true. I'm in the same boat... but it's kinda odd if you don't spend more when you make more money. If you saw your doctor driving a 1992 rusty civic, would you look for a new doctor? If I made $150k/year and had children that shared a bedroom, people would think wtf.

People spend the same amount of money as others in their class/level/education, simple as that.

[BR3W CITY]

Am I the only one who doesn't use credit cards? I use my debit card for everything, if I don't have the money for it, I don't buy it. The last few cars I purchased was also in cash.
Cash for everything possible. Got a CC but try not to use it, use the GF's credit cards once in a while.
I feel like using cash today makes me sound ghetto, but I sure as hell aren't in debt.

[pOrk]

The more you make, the more you spend. It's sad, really. Five years ago I made less than what I spend on my student loans and house payment each month.

Meh, I don't completely agree with that. I have been working 2 fulltime jobs for the last 5 months and I don't spend anymore then I have before. I guess I can't test that theory much though since I just got fired from one of them. Double the income was nice for awhile, we will see how Uncle Sam bends me over for it come the end of the month.

[-stew-]

Disappoint.


Up to like $500. :/

[michelle]

Up to like $500. :/

You bought me a present!?!?

[Wagonbacker9]

Meh, I don't completely agree with that. I have been working 2 fulltime jobs for the last 5 months and I don't spend anymore then I have before. I guess I can't test that theory much though since I just got fired from one of them. Double the income was nice for awhile, we will see how Uncle Sam bends me over for it come the end of the month.

Working 80 hrs a week would put a crimp in my ability to spend money. LOL

[-stew-]

You bought me a present!?!?

I bought you a lot of lunch meat and a lot of bread. So you can make me a lot of fucking sandwiches.

[Ricky Bobby]

someone said sammich im in

[michelle]

I bought you a lot of lunch meat and a lot of bread. So you can make me a lot of fucking sandwiches.

http://29.media.tumblr.com/tumblr_ljd5qol6Z51qixleeo1_250.gif

[MyP71Vic]

My fiance and I are 25 with $35k in available CC but only carry a 5-10% CC debt because it helps build up credit and we are putting away our money for our wedding which will be about $30k. We bought a house last year and that is the only real debt that we have which we are not currently capable of paying off other than school which we are in again. She is going for a double Masters and me a lowly bachelors. Yes she makes most of the money and I am ok with that!
-Nick