The Average American Household Credit Card Debt

When economic times are good, statistics like the average household credit card debt aren’t as interesting. People are employed and they’re able to get loans for just about anything they want. When the economy goes sour, that’s when consumers and policy makers alike become more concerned with data on the financial health of Americans. Luckily for us, the U.S. government is always compiling economic data to help influence policy decisions. Unfortunately, there is almost always a large lag between the period in which the data is collected, and when it’s released. To find out the hard data compiled on the average household credit card debt, I went directly to the Federal Reserve’s 2007 Survey of Consumer Finances and 2009 Survey of Consumer Finances Follow-up. The 2007 Survey is the normal survey conducted every three years, which was the source for most of the information posted below. The 2009 Survey was a follow-up that re-interviewed the original 2007 participants to see how their finances changed between 2007 and 2009.

General Debt of American Households
Average Household Credit Card DebtIn 2007, the Survey of Consumer Finances reported that 77% of American families had some type of debt. I find debt to be interesting because its highest use is the middle class. The poorest families, below the 20th percentile of income, were least likely to have debt. Of these families, 52.6% held any form of debt, and only 28.8% had credit card debt. This stems from the fact that people in this income bracket are the least credit-worthy. Families with incomes in the 90th percentile are the second least likely to carry credit card debt, at 38.5% of families.

Average American Household Credit Card Debt
In 2007, the average American household that held credit card debt was $7,300. It’s clear that the credit card balances of some families is quite high because the median balance for families with credit card debt is $3,000. That means there are families with significant amounts of credit card debt that bring up that average. Balances held by high-income families, childless couples, and families headed by someone who is self-employed increased the most.

Average Credit Card Balance
In its 2007 Survey, the Federal Reserve found that 73% of families had a credit card. This statistics surprised me, because it means that 27% of American do not have a credit card. I’m guessing this 27% is composed of poor people who do not qualify, and Dave Ramsey fans who have cut theirs up. The Federal Reserve also found that 46% of families held credit card debt.

Average Credit Card Limit and Interest Rate
The median number of credit cards held by families in 2007 was two. That’s a far-cry from my wallet-busting 10+. However, two is probably all that someone genuinely needs. The median credit limit was $18,000, which means some people have some very high credit limits. I’m sure that the median limit has fallen since 2007. The median interest rate on the card with the highest balance (or newest card, if no balances) was 12.5%.

Overall this data is interesting, but there isn’t anything terribly shocking. I was surprised at the fact that the median credit card debt by those carrying a balance was only $3k. I guess Americans are more responsible than common media might lead us to believe. Good for us.

(Photo: 401K)