Consumer credit card debt is said to be one of the major causes of our economic crisis. Based on statistics, the average American owes more than $8,000 or more in credit card debt. Considering this figure, one can say it will probably take a long time for us to recover and so we have to be careful on how we spend our money. We may now be thinking of spending less and would probably stop using our credit cards. However, does this statistics actually show us our actual financial state?
The fact is that there are a lot of Americans who don’t owe any amount to credit card companies and those people who do owe those credit card companies, owe only about $2,000 or even less. It also shows that only 1 out of 20 Americans owes $8000 or more. This is according to the Federal Reserves 2001 Survey of Consumer Finances. Keep in mind also that there are a number of people who don’t have any credit cards, in fact there are 23.8% of them. And according also to the Federal Reserves, 31.2% paid off their outstanding balance in full. So if we add it up, about 55% don’t owe anything from credit card companies.
So where did this $8,000 come from? This amount probably was taken from CardWeb.com, a service which monitors the trend of credit cards. I’m not saying their figures are wrong, it’s just that this figure is based on the average consumer credit card debt. This means that they simply divided the total outstanding credit card debt in 2002, which was $750.9 billion to the number of American household which is 84 million, assuming that each American household has one credit card. When you get the average from let’s say a small population with a huge total outstanding balance, then it would greatly affect the average amount, wouldn’t it?
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