I was listening to this NPR story and right from the outset was floored by this statistic: the average household has credit card debt of $7,753.
What!? Is this true. No backup was given for the figure. Has anyone heard something similar? I find this hard to believe.
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11 comments
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January 27, 2007 at 9:30 pm
gwynne
I’ve heard of even larger amounts being the average, something like $12K! I am not surprised. It’s a big, big problem in this country, especially as interest rates rise and credit becomes less obtainable.
January 27, 2007 at 11:00 pm
beth
Ditto what Gwynne said – not surprised and figured it was higher. Our financial advisor always accuses us of being communists b/c we have no credit card debt – it’s just not the American way, I guess.
January 28, 2007 at 6:53 am
jvjannotti
But that’s just credit cards, I’m assuming it doesn’t count other forms of debt like mortgages and car loans, etc.
Yikes!
January 28, 2007 at 11:19 am
Jennifer
I, too, have heard similar and higher figures. It’s scary. I had a realtor once relate a story about a family who wanted to sell their house and move up. He looked at their finances to determine what they could afford and they couldn’t afford to move. Why? Because they had taken what equity they had and used it to buy a lexus. And that was an all too common scenario he was running into. Sad that people don’t seem to understand what they’re doing to themselves. I don’t think most people are taught the basics of finances.
January 28, 2007 at 1:00 pm
Jen
Oh yeah, that 7,000 figure is low. Most people I know (have heard) are more like 20,000 + just on credit cards. I personally start freakin’ and getting my stuff together when it’s much less than 7,000. My friends say, oh, that’s nothing. May be nothing but what’s the point in working to pay debt and have no fun?
And I too know some people who constantly take the equity out of their house to buy things. And you think, huh? Yeah, it’s nice to have a pool and whatever else, but how in the world does anyone afford a 4,000 mortgage plus everything else in life?
It boggles the mind.
Jen
January 28, 2007 at 3:03 pm
Stephen
I can believe it. From experience.
January 28, 2007 at 3:03 pm
Stephen
‘Course most of this is stuff we couldn’t help. It seems like we’ve had a lot of emergencies over the past 5 years. But God will get us through.
January 28, 2007 at 4:01 pm
Rick
I’ve heard that also. Probably from Dave Ramsey, who’s a popular radio talk show host that discusses personal finances.
January 29, 2007 at 7:50 am
Jennifer
I found this article http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp
which makes it seem as though there are people who have tons of cc debt, but those with high balances jack up the average. Maybe we do just hear so much about people who have 10 or 20 or $30K in cc debt. It’s still scary. And that doesn’t take into consideration other debt. So, it’s still a problem, just perhaps not so pervasive as it seems.
January 29, 2007 at 12:29 pm
jvjannotti
Jennifer,
I wonder how old that article is? I didn’t see a date on the page and the statistics are a few years old, but even so, I think she’s understating the problem… maybe as a corrective to the overstatements she criticizes.
I’m not really worried about the impact of excessive CCard debt on the economy (probably because I don’t know enough about the issue). What boggles my mind, even after viewing those less extreme but still disconcerting statistics, is how hard it is for many folks to decide to live within their incomes. I realize that’s not possible for some people at some times, but I’m sure it’s not necessary for 21 percent of all households to carry more than $2,000 of debt (and for 10% of cardholders to carry more than $10,000!!!).
What I’d really like to see is a statistic on average monthly credit card debt as a percentage of household income over time. The article gives a few such data points at the end, none of which are encouraging.
February 5, 2007 at 10:23 pm
Marissa Miller
*sigh* I have way more than that at this point in time… My husband has nearly twice as much…
But his debt was good debt! He charged all those flights to have a long-distance relationship with me!
I guess he’s – haha – paying for it now.