You’ve probably seen headlines like this: Americans have an average of $15,000 in credit card debt!
That’s not the case. And now the Survey of Consumer Finances, a major report issued by the Federal Reserve every three years, gives a new in-depth look at how Americans have been handling their credit cards.
They’ve gotten much better with debt. In fact, most families don’t carry a credit card balance from month to month.
The report says:
Between 2010 and 2013, the fraction of families with credit card debt … decreased. Median and mean balances for families with credit card debt fell 18 percent and 25 percent, respectively, and the fraction of families that pay off credit cards every month increased.
Some of the highlights from the report:
- In 2013, 38.1 percent of households carried a credit card balance, compared with 39.4 percent in 2010. That’s a continuation of a decline from 2007.
- The median balance for families that carry a balance was $2,300 in 2013, down 18 percent from $2,800 in 2010. Median means half of households had more and half had less than that amount.
- The mean or average balance among those who carry a balance fell from $7,600 in 2010 to $5,700 in 2013, a 25 percent drop.
- Sixty-four percent of those surveyed said they carry a credit card for convenience and do not carry a balance, up from 56.2 percent in 2007 and 63 percent in 2010.
So much for 2013. There are indications that some people have lost their credit card discipline.
While U.S. consumers paid down roughly $32.5 billion in outstanding credit card debt during the first quarter of 2014, we erased nearly all of that with the largest Q2 debt build-up witnessed since the Great Recession. Therefore, CardHub now projects that U.S. consumers will end the year with $54.79 billion more credit card debt than we started with.
CardHub said the average household credit card balance increased by $174 in the second quarter, raising it to $6,802. What’s more, the credit card comparison site said it anticipates that debt will exceed $7,000 by the end of the year.
How is your credit card spending? Are you starting to carry a balance? Share your comments below or on our Facebook page.
Karen Datko contributed to this post.