Disturbing Credit Card Statistics

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Disturbing Credit Card Statistics
December 11, 2015

Credit cards offer an easy way to tide you over until your next paycheck comes, but that easy money comes at a hefty price. Interest rates vary anywhere from zero percent promotional introductory rates to 29.99% or even more in some cases.

With interest rates this high, it is easy to see why horrifying statistics exist. Consider these figures from the 2013 Survey of Consumer Finances published by the Federal Reserve.

Percent of Families with Credit Card Balances

In an ideal world, everyone should pay off his or her credit cards in full every month. Unfortunately, more than one out of every three families in your neighborhood could potentially be struggling to make that a reality.

According to the survey, 38.1% of families carried a balance in 2013. Thankfully, that is down from 46.1% of families in 2007, just before the recession. Keep this in mind when you are thinking about making a purchase that you cannot afford just to keep up with the Joneses. They might not be able to afford it either, as evidenced by their credit card debt.

Median Value of Credit Card Balances for Families with Holdings

Imagine lining up everyone with credit card debt from the lowest balance owed to the highest balance owed. Next, pick out the family that is exactly in the middle of the line. They would owe $2,300, which is the median balance of every family that had credit card debt at the time of the survey.

The median fell from a 2007 high of $3,400 per family, but it is still significantly above the ideal amount of no debt at all.

Luckily, half of those families with credit card debt owe less than $2,300. Unfortunately, the other half owe more than $2,300 - significantly more, in fact, as you will see.

Mean Value of Credit Card Balances for Families with Holdings

To visualize this next statistic, simply think of how much credit card debt every family owes and add it all up in a giant pile. Next, you divide the pile equally among the number of families that have credit card debt. That will give you the mean balance of $5,700 for families in debt.

Notice the mean credit card debt for a family is more than double the median credit card debt for a family. This tells us that the 50% that have more than the median $2,300 of credit card debt owe much more than just $2,300. The higher balances skew the mean to be almost 250% of the median; that is a tough row to hoe for those in the two upper quartiles of the statistics.

There is some good news, though. Mean balances for families with credit card debt have decreased from a high of $8,200 back in 2007 before the recession hit. Still, $5,700 is not something you would want to ignore, especially with the balance garnering interest charges each month it remains unpaid.

Homeowners Are More Likely to Have Credit Card Debt

While 30.9% of non-homeowners carry a balance, 42% of homeowners have credit card debt. In fact, at no point in time during the survey's history dating back to 1989 did fewer homeowners carry a balance than non-homeowners did.

The survey does not say why more homeowners carry balances. However, if we had to venture a guess, we would bet that the potentially high costs of unexpected maintenance on homes would be one of the factors, since renters normally do not have to pay to maintain their homes. Simply paying off a mortgage may give homeowners more need for a little credit when their cash funds are low.

Credit cards can be a powerful tool, but misuse can cause a lot of financial trouble. Statistics show the sad reality of the typical American family's struggle with credit card debt, as shown in our Consumer Credit Crisis infographic. Use these statistics as a motivator to avoid this fate; don’t become the next credit card debt statistic.

If you want to settle outstanding debts for less than what you owe, try our debt settlement tool.

Photo ©iStock.com/Andystjohn
  Conversation   |   12 Comments

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Carla | 12.11.15 @ 19:01
Luckily, we cut up our credit cards years ago. It is too easy to go beyond our means.
Britt | 12.11.15 @ 19:01
I refuse to get a credit card because I'm afraid of completely destroying my credit.
Amanda | 12.11.15 @ 19:02
That's some big numbers to swallow, I'm glad we only have 1 and pay it in full each time it's used. Only reason I have one is for credit. Credit cards are nice to have but yet bring so much more drama and trouble if you're not careful.
Kailie | 12.11.15 @ 19:02
This is scary. I only have one card that I make sure I am always on top of.
Kamie | 12.11.15 @ 19:03
The statistics of this all is interesting, never realized that how close the percentages are for non-homeowners and homeowners are.
Steffanie | 12.11.15 @ 19:03
Credit card debt is so easy to fall into. We cut our cards up a few years ago.
Erin | 12.11.15 @ 19:03
I think people tend to forget that they still need to pay those bills off and need to continue budgeting whether paying with a card or cash. It's too easy to charge something and forget about it.
Kyle | 12.11.15 @ 19:03
Not very flattering information. I don't carry credit cards for this exact reason.
Bobbie | 12.11.15 @ 19:04
I always pay them off a couple days after I've purchased something, All the perks and none of the debt.
Alec | 12.11.15 @ 19:04
Sadly, my husband and I are part of the debt crowd. Due to some unforeseen circumstances, we ended up racking up debt this year. Although I'm in debt, I have to say I'm glad I had the card since it saved us. We're very careful not to use it for things we don't actually need.
irene | 12.11.15 @ 19:05
That's a lesson I learned the hard way but during the recession we had no choice but to live on the credit cards. It took us til recently to pay them off.
Chrisitna | 12.11.15 @ 19:06
Unfortunately, when I lost my job I had to use my credit cards to survive for 8 months before finding another so I am a horrible statistic. Debt adds up quickly, and takes so much longer to pay it off than to run it up!
$commenter.renderDisplayableName() | 12.03.20 @ 16:43