Average American Credit Card Debt

Credit Card Debt before 2007
A lot of disparity exists around what the average American owes on their credit card or on revolving debt, and there are many who throw figures around such as $8,000, $11,000 and higher while others suggest that it is much lower.  Where this disagreement comes from is due to the ways of measuring how much debt the average American owes.  Some economists rely on averages while others rely on the ‘mean’ figure.  

The truth is that in 2001 only about 1 in 20 households owed $8,000 or more on their credit cards, most only carried about $2,000 of debit.  These figures are courtesy of the Federal Reserve's 2001 Survey of Consumer Finances.   

Websites that track credit card trends such as CardWeb base their figures on the average debt per household who hold at least one credit card and not the average debt of the credit card itself, explaining why a figure of $8,000 is used.  How they got this figure was by dividing the outstanding credit card debt figure of $750, 9 billion in 2001 by 84 million Americans who were reported as holding a credit card in that year.  CardWeb also reports that credit card debt is on the rise, yet averages don’t tell the whole story.

In 2002 the average credit card debt was about $2,200 per person while some Americans owed more than $9,000.  These statistics are derived from the Federal Reserve’s Survey of Consumer Finances.  The total outstanding credit card debt in 2002 was a reported total of $904 billion.

Credit card spending in 2007 and 2008
By the end of 2008 about 91.1 million Americans owned at least one credit card as opposed to 90.4 million in 2007, 59 million in 2000 and 173 million in 2006, however The Census Bureau project that 181 million Americans will hold at least one credit card by 2010.   

In 2008 the average balance per open credit card was $1,157, Americans over 60 showed an average balance of $763 and in 2007 credit card balances made up 3.5% of the total revolving debt for American families.   Statistics showed that undergraduates carried record high credit card balances, averaging about $3,100 each.  

In 2007 97% of Americans used a credit card , yet in 2008 this figure dropped to 72%, yet this still equates to 23 billion credit card transactions in one year and this figure is projected to grow by 26% over the next 5 years.  

In September 2008 credit card spending increased by 7% from the previous year amounting to a total of $971 million which equated to an average of $3,184 per person and $8,299 per household.  By October 2008, the figure has risen to $976 billion total in outstanding credit card debt.

Credit card spending in 2009
In 2009 credit card statistics show that almost 40% of americans carry a balance of only around $1,000 on their credit cards.

The days of credit card splurging on luxury items is all but gone and even though a new bill was passed by the Senate in May that has tightened the rules on credit card interest rates, it seems to be unnecessary.  In March 2009, the Federal Reserve reported that outstanding consumer revolving debt fell for the sixth month in a row by $5.4 billion.  

In Miami alone they reported that the average credit card debt per household is almost $10,000 and in order for Americans to pay off their revolving credit debt they will have to forgo almost 23% of their yearly income.

Recession has curtailed credit card spending and as at April 2009 total credit card debt stood at $931 billion which equates to $7,957 per household and around $4,100 per person.    The Federal Reserve reported than in march 2009 Americans reduced their credit card debt by 6.8% which is the second largest drop recorded.  Savings have increased to 4.2% and obtaining credit is getting harder as banks are tightening their lending standards.

The Federal Reserve estimates that about 75% of American households own and use at least one credit card.  

With an average of about $4,000 owed by each individual owning a credit card and double that per household it is evident that credit card debt may be a problem for most Americans.