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Debt Statistics

By Credit.com

Average Debt Balances
  • The average credit card borrower had a balance of $5,710 in Q3 2008. Source: TransUnion.
  • The average American with a credit file is responsible for $16,635 in debt, excluding mortgages, according to Experian. (Source: U.S. News and World Report, August 2008)

Historical Debt Growth
In the past year (Oct 07 to Oct 08):
  • Total American debt increased 3%
  • Revolving (credit cards generally) increased 5%
  • Non-revolving (home and auto loans generally) increased 2%
In the past 10 years (Sept 98 to Sept 08):
  • Total American debt increased 85%.
  • Revolving (credit cards generally) increased 71%
  • Non-revolving (home and auto loans generally) increased 95%.
In the past 20 years (Sep 88 to Sept 08):
  • Total American debt increased 258%.
  • Revolving credit increased 450%
  • Non-revolving increased 196%.
(Source: Federal Reserve Statistical Release G.19 Historical Data)


The Cost of Credit Card Debt
  • A $5,000 credit card balance with a 9% APR and a monthly payment of $125 would take 48 months and $967 in interest to repay.
  • A $5,000 credit card balance with a 16% APR and a monthly payment of $125 would take 58 months and $2,193 in interest to repay.
  • A $5,000 credit card balance with a 27% APR and a monthly payment of $125 would take 104 months and $7,936 in interest to repay.

Debt Collections
Debt collectors generate more complaints to the Federal Trade Commission than any other industry. Since 1998, the FTC has brought 21 lawsuits against illegal debt collection practices. (Source: FTC)


Student Debt
Two thirds of all College students have student loan debt after graduation, with an average of $19,237. The median debt load is $17,120; a quarter of undergrads borrow more than $25,000, and a tenth borrow more than $35,000. (Source: The National Center for Education Statistics)


Trends:  Debt & Money Management vs. Retirement Planning
In reaction to the poor economy, employees are focusing on debt and money management (80%) as opposed to retirement planning—even (15%) though a financial analysis reveals retirement planning to be a bigger priority.  This is likely to impact their ability to retire.

Retirement Planning Preparedness
  • 86% have no idea if they are on track to retire.
  • 72% are not sure if their asset allocation is appropriate for their risk tolerance and time horizon.
  • 52% admit they do not have basic knowledge of stocks, bonds or mutual funds.
(Source: Financial Finesse)



  
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