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Consumer Debt Statistics

The Role Debt Plays in the U.S. Economy

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Cut credit card

Many consumers cut credit cards during the recession -- and left them that way.

Photo: Chemistry/Getty Images

Consumer debt drives the American way of life. It allows you to buy your home, education, and car without having to save for it. As long as the economy grows, you can pay off this debt more easily in the future. That's because your house grows in value, your education allows you a better-paying job and your car...sorry, your car is just an expense. But at least auto loans create jobs for autoworkers!

In May, consumer debt rose 7.4%, to $3.195 trillion. Of this, $2.3 trillion was for loans (mainly education and auto) and it increased 9.3% during the month. Only $872.2 billion was credit card debt, and it increased 2.5%. (Source: Federal Reserve G-19 Report)

The statistics on average consumer debt show how debt increased greatly between 2002-2008. However, during the Great Recession, banks cut back on consumer lending. Then the Dodd-Frank Wall Street Reform Act increased regulations over credit cards, so they tightened credit standards. 

There are two main types of consumer debt: revolving debt, like credit cards, and non-revolving debt, like auto loans and mortgages. Both stimulate economic growth.

Credit Card Debt

Consumer debt that's meant to be paid off every month is credit card debt, also known as revolving debt. Credit card debt reached a peak of $1.028 trillion in July 2008, an average of $8,640 per household. (Source: Federal Reserve Revised Credit Card Debt Chart)

Credit card debt increased thanks to the Bankruptcy Protection Act of 2005, which made it more difficult to people to file for bankruptcy. As a result, they incurred more debt since they couldn't file for bankruptcy.

The recession curtailed credit card debt. It fell more than 10% in each of the first three months of 2009. By April 2011, credit card debt had dropped to a low of $839.6 billion. That's an average of $7,055 of credit card debt per household. (Note: The per household estimate is based on 119 million households, or 308.7 million/2.59 persons per household. Source: U.S. Census, 2010 Data; Average Household Size)

Loans

Loans, such as auto loans, mortgages, or school loans, are a form of consumer debt called non-revolving debt. These loans are usually held for the life of the underlying asset. For a car, it's three to five years, and a home mortgage is usually 15-30 years. These loans can be paid back with fixed interest rates, or variable rates. If the borrower fails to make payments, the bank will usually reclaim the underlying asset.

Of course, the bank can't claim any asset on school loans. For that reason, most school loans are guaranteed by the Federal government. These loans have very low interest rates, to encourage higher education.That's because a more educated workforce leads to a healthier economy, in the long run.

Average Consumer Debt Statistics Since 2006 (in trillions of dollars)

Month Credit Card Loans Total % Change Comments
2006 Jan $.876 $1.495 $2.371 2.3% Credit card debt rises since people can't file for bankruptcy,  thanks to Bankruptcy Prevention Act
Mar $.884 $1.504 $2.400 0.5%  
Apr $.890 $1.511 $2.411 0.4%  
May $.897 $1.515 $2.411 0.2%  
Jun $.896 $1.504 $2.400 -0.7% Fed funds rate raised to 5.25%
Jul $.899 $1.511 $2.410 0.5%  
Aug $.905 $1.521 $2.426 0.7%  
Sep $.908 $1.529 $2.426 0.5%  
Oct $.911 $1.525 $2.436 -0.3%  
Nov $.917 $1.531 $2.448 0.4% Falling home prices force owners to switch from equity lines of credit to credit cards.
Dec $.925 $1.538 $2.463 0.4%  
2007 Jan $.927 $1.541 $2.468 0.2%  
Feb $.932 $1.548 $2.480 0.4%  
Mar $.98 $1.555 $2.493 0.4%  
Apr $.941 $1.560 $2.501 0.3%  
May $.951 $1.567 $2.518 0.5%  
Jun $.954 $1.574 $2.528 0.4%  
Jul $.961 $1.584 $2.545 0.6%  
Aug $.971 $1.594 $2.565 0.7% Fed began lowering rates.
Sep $.978 $1.602 $2.580 0.5%  
Oct $.986 $1.607 $2.592 0.3% Credit card debt rose 8% in the past year.
Nov $.996 $1.607 $2.608 0.3% Loans only rose 5% over last year. Credit card debt increase 11.5% in the past year, higher than the 2006 growth rate of 6.3%, and 2005's rate of 3.1%. 
Dec $1.003 $1.614 $2.617 0.1% Rate at 4.25%.
2008  Jan $1.009 $1.623 $2.632 0.6% Credit card debt grew 7% in one year, while loans grew 1%.
Feb $1.016 $1.631 $2.647 0.5% Credit card debt was 5.9% higher than last year - growing twice as fast as in 2005. However, total debt only grew 2.4%.
Mar $1.019 $1.637 $2.656 0.3%  
Apr $1.022 $1.642 $2.664 0.3% High gas prices forced consumers to use credit cards more. Loan credit terms tightened.
May $1.021 $1.646 $2.667 0.2% Less credit was offered by banks, as consumers reached credit limits, and consumers struggled to make minimum payments.
Jun $1.022 $1.650 $2.672 0.3%  
Jul $1.022 $1.653 $2.676 0.2% Consumers used stimulus checks instead of using credit cards.
Aug $1.020 $1.651 $2.672 -0.1% Debt fell, the first sign that the Banking Credit Crisis was affecting consumers. A tightening job market and higher unemployment meant fewer families could afford credit card and auto purchases. That was a reversal from the last two years, when the declining housing market caused many families to switch from home equity loans to credit cards to finance purchases.
Sep $1.015 $1.652 $2.667 0.0%  
Oct $1.020 $1.649 $2.668 -0.2%  
Nov $1.012 $1.649 $2.660 0.0%  
Dec $1.005 $1.646 $2.651 -0.2% Rate at .25%.
2009  Jan $1.008 $1.652 $2.660 0.3%  
Feb $.999 $1.651 $2.650 0.0% Credit card debt fell an unprecedented 13.9% in the past year.
Mar $.987 $1.644 $2.631 -0.4%  
Apr $.982 $1.640 $2.622 -0.3% Credit card debt was 11.3% lower than the year before.
May $.970 $1.646 $2.615 0.4% The savings rate has increased 6.9% the highest since 1993. The opening of new accounts declined 37% during the first three months of 2009 compared with the year before.(Source: CreditCards.com)
Jun $.966 $1.633 $2.599 -.08% American zest for credit card debt grew even more stale. The nine-month decline was the worst since the Federal Reserve began keeping records. According to Creditcards.com, 15-20% of the drop was due to banks lowering credit lines. 
Jul $.963 $1.632 $2.595 0.0%  
Aug $.953 $1.631 $2.584 -0.2%  
Sep $.949 $1.628 $2.577 -0.2% Credit card debt dropped 8% in the past year, the biggest dip since the 11.3% drop in April. This ten-month decline is the worst since the Federal Reserve began keeping records. According to Creditcards.com, the falloff is the direct result of higher unemployment.
Oct $.942 $1.632 $2.574 0.2% Banks reduced their use of teaser rates in anticipation of increased credit card regulations to protect cardholders. Credit card debt dropped 13% in the past year.
Nov $.926 $1.631 $2.557 -0.2% Credit card debt dropped a whopping 18.5%. Credit card delinquency rates are rising, according to Lowcards.com.
Dec $.917 $1.636 $2.554 0.3%  
2010 Jan $.911 $1.632 $2.543 0.2% Use of credit cards has fallen for the past 12 month, a result of 22 months of job losses and tightened bank lending standards. However, loans for auto, furniture and consumer electronics were up 5% over the prior year. 
Feb $.904 $1.630 $2.534 -0.1% Loans were down 1.6% from the prior year.
Mar $.901 $1.637 $2.538 0.4% Loans rose 3.9%, indicating consumers are sick of the recession and are borrowing to buy the big-ticket items they've done without for the past several years.
Apr $.896 $1.635 $2.531 -0.1%  
May $.887 $1.636 $2.523 0.1%  
Jun $.880 $1.642 $2.523 0.4%  
Jul $.874 $1.643 $2.517 0.1%  
Aug $.868 $1.650 $2.518 0.4% Falling credit card debt means Americans will buy must-haves, not nice-to-haves. This Shift to Thrift means businesses that provide value for the money did better after the recession.
Sep $.862 $1.659 $2.521 0.5% Credit card debt dropped 12.1%, after falling 7.3% in August. Americans owed $862 billion -- less than they did in 2005.
Oct $.856 $1.674 $2.530 0.9%  
Nov $.851 $1.680 $2.531 0.3% Consumers cut back debt in all but one area: student loans. That's because the Federal government loaned triple the amount it did in 2008, thanks to the Stimulus Package and the Health Care Reform Bill. Student loans were $315 billion. 
Dec $.841 $1.807 $2.648 7.6%  
2011 Jan $.838 $1.820 $2.658 0.7%  
Feb $.836 $1.834 $2.670 0.7%  
Mar $.838 $1.838 $2.675 0.2%  
Apr $.834 $1.846 $2.680 0.5%  
May $.837 $1.851 $2.689 0.3% Americans began whipping out the plastic again, as credit card debt expanded a surprising 5.8% in May. That could be the end of the longest decline in credit card use since the Federal Reserve began keeping records in 1943.  At least it breathes some hope that retail sales could soon be improving. Then again, it could be folks had to run up credit card debt to pay those high prices at the gas pump. Gas prices hit a high of $3.96 a gallon before dropping back in June.
Jun $.839 $1.860 $2.699 0.5%  
Jul $.838 $1.883 $2.721 1.2%  
Aug $.838 $1.875 $2.713 -0.4%  
Sep $.839 $1.884 $2.723 0.5%  
Oct $.840 $1.886 $2.726 0.1%  
Nov $.843 $1.901 $2.743 0.8%  
Dec $.843 $1.915 $2.757 0.7%  
2012 Jan $.842 $1.930 $2.771 0.8%  
Feb $.843 $1.941 $2.783 0.6% The Federal government's student loan program continued to be one of the nation's strongest lenders in February. For the second month in a row, Americans owed $453 billion in school loans,four times greater than the $98 billion in school loans owed in 2007. This kind of investment spending means a more highly skilled workforce, which could eventually lead to a reduction in the nation's income inequality.
Mar $.842 $1.952 $2.794 0.6%  
Apr $.840 $1.966 $2.806 0.7%  
May $.847 $1.979 $2.826 0.7% Americans whipped out the plastic, driving credit card debt up 11.2%. Loans rose a more reasonable 6.5%. The upswing was in response to an increase in offers sent out by banks, according to Roy Persson, director of competitive tracking services at Ipsos. For example, Discover offered a 24-month interest-free balance transfer period. (Source: Fox Business News, Consumers Credit Card Balances Shoot Up in May, July 22, 2012)
Jun $.844 $1.999 $2.844 1.0%  
Jul $.842 $2.007 $2.849 0.4%  
Aug $.847 $2.021 $2.868 0.7% Total consumer debt was $2.868 trillion a new all-time record.
Sep $.845 $2.033 $2.878 0.5%  
Oct $.848 $2.047 $2.895 0.7% Credit cards were used to break new records in Halloween retail sales. 
Nov $.848 $2.062 $2.910 0.8% Shoppers relied more on cash, debit cards and layaway than credit cards over the Black Friday weekend.
Dec $.846 $2.079 $2.924 0.8%  
2013 Jan

$.849

$2.092 $2.941 0.6%  
Feb $.850 $2.113 $2.964 1.0% Consumer credit rose to a new record, driven by a stunning 10.9% spike in so-called "non-revolving" credit, which is mainly school and auto loans.
Mar $.849 $2.120 $2.970 0.3%  
Apr $.849 $2.130 $2.980 0.5% In April, consumers only added another $100 million in credit card debt. This sounds like a lot, until you realize it's just a 1% increase to the $849.1 billion they already owed. Even that's much, much less than the $1 trillion owed in 2008. Overall, it's a healthy sign for a country that tried to attain the American Dream on the back of plastic.
May $.855 $2.143 $2.998 0.6% Shoppers resumed shopping in May, using credit cards like it was 2006. They added an amazing $79.3 billion dollars to their credit cards, increasing their debt by 9.3% in just one month. Normally, this would be worrisome -- after all, credit card interest rates are the highest you can get. Furthermore, if people can't pay off this debt, then it means more bankruptcies in the future. However, the total amount of credit card debt is still lower than in 2008 ($1 trillion). The reason it's good news is it showed Americans were regaining confidence in the economy.
Jun $.852 $2.161 $3.012 0.8% One-fourth of the $2 trillion in loans is owed to the Federal government for education. There's a lot that's been written about how unfair this debt is to students, how they can't get good jobs after spending all this to get a B.A. Many people say it's not worth taking on this debt. However, if you or someone in your family is thinking about making this investment in yourself, be very sure if it will pay off.
Jul $.852 $2.174 $3.025 0.6% Instead of using their high-interest credit cards, Americans are wisely taking advantage of low interest-rate loans to finance autos, furniture and education. 
Aug $.853 $2.188 $3.041 0.7% Rising interest-rates prompted consumers to lock-in a total of $2.19 trillion in loans. As a result, this non-revolving credit increased 8% in August, after 6.8% in July and 10.5% in June. This will continue even as interest rates rise. That's because auto and other loans are still at historically low levels (an average 4.46% in August vs 7.02% in 2008).
Sep $.852 $2.229 $3.057 0.8%  
Oct $.856 $2.218 $3.074 0.6%  
Nov $.852 $2.229 $3.081 0.5% Credit card debt barely inched up .6% in November, one reason why retailers saw lackluster sales on the Black Friday weekend. On the other hand, families now owe $2.2 trillion in loans. More than half is for school loans, while another 40% is for car loans.
Dec $.857 $2.242 $3.099 0.6% Credit card debt skyrocketed in December, rising 7%, after a meager .6% rise in November, and 5.6% in October. Americans now owe $857 billion on their credit cards, more than any time since the recession. Auto and school loans increased more, as families added 7.4% in low-interest debt.
2014 Jan  $.857   $2.256  $3.113  0.6%  
Feb  $.859  $2.269  $3.129  5.9% recent survey by Bankrate.com explains why use of credit cards is still down. Nearly 1/3 of Americans don't even have enough cash in their emergency accounts to pay off their credit card debt. That's the highest percent since 2011. Slightly more than half do have enough in savings to pay off this expensive debt, while the rest (17%) have neither credit card debt nor savings.
Mar  $.862  $2.287  $3.149  7.5%  
Apr  $.870  $2.305   $3.175   10.0% Credit card debt jumped 12.3%, as Americans fell behind in payments. Student loans are now $1.26 trillion, while auto loans grew to $892 billion.
May  $.872  $2.322   $3.195   7.4% Credit card debt jumped 12.3%, as Americans fell behind in payments. Student loans are now $1.26 trillion, while auto loans grew to $892 billion.

 

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