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Avg. American Household Has $8,284 in Credit Card Debt

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Avg. American Household Has $8,284 in Credit Card Debt

The Average American Household Has $8,284 in Credit Card Debt

 

"In fact, American credit card debt is nearing its highest point since the Great Recession and could top it in the next year. Thirty years ago in 1988, the average American household’s credit card debt hovered at just $2,000."

 

http://fortune.com/2018/12/10/american-household-credit-card-debt/

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Re: Avg. American Household Has $8,284 in Credit Card Debt

Sorta sad to see this but its true. Alot of people are using credit to stay afloat with today’s economy. Current wages are not enough and with the cost of goods today and inflation, it’s definitely not enough to survive.


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Message 2 of 22
Established Contributor

Re: Avg. American Household Has $8,284 in Credit Card Debt


@xaximus wrote:
Sorta sad to see this but its true. Alot of people are using credit to stay afloat with today’s economy. Current wages are not enough and with the cost of goods today and inflation, it’s definitely not enough to survive.

I've done a lot of math around my own $68,000 gross salary. My non-discretionary expenses are just under half of my net income after all taxes. Rent and health insurance make up 60% of that. If I had 2 kids and a mortgage (I rent), with the extra property taxes, insurance, and general maintenance on a house, I would be forced to use my credit line as my only emergency fund. Because there is no way I'd be able to put a lot into savings, that's for sure.

 

It seems like a lot of people I know are not using their credit cards for non-discretionary expenses/last resort emergency fund, it's more of a 'I really need a break from this life' fund. They take vacations to Hawaii and Disney World with the kids, just to stay sane, basically.

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Re: Avg. American Household Has $8,284 in Credit Card Debt


@CassieCard wrote:

@xaximus wrote:
Sorta sad to see this but its true. Alot of people are using credit to stay afloat with today’s economy. Current wages are not enough and with the cost of goods today and inflation, it’s definitely not enough to survive.

I've done a lot of math around my own $68,000 gross salary. My non-discretionary expenses are just under half of my net income after all taxes. Rent and health insurance make up 60% of that. If I had 2 kids and a mortgage (I rent), with the extra property taxes, insurance, and general maintenance on a house, I would be forced to use my credit line as my only emergency fund. Because there is no way I'd be able to put a lot into savings, that's for sure.

 

It seems like a lot of people I know are not using their credit cards for non-discretionary expenses/last resort emergency fund, it's more of a 'I really need a break from this life' fund. They take vacations to Hawaii and Disney World with the kids, just to stay sane, basically.


Exactly. People are used to a better quality of life growing up - than current stagnant wages provide, along with a stark lack of company benefits. So, credit cards are a way to stem the tide, and feel like they can reward themselves for accomplishing something... even though it just brings on a death spiral of debt.

 

It would be interesting to evaluate debt as a percentage of average income, throughout history. With so many incomes in a household, just to make ends meet... I would gather that debt looms a lot larger - as a percentage of income - than ever before.

Message 4 of 22
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Re: Avg. American Household Has $8,284 in Credit Card Debt


@trusty wrote:
So, credit cards are a way to stem the tide, and feel like they can reward themselves for accomplishing something... even though it just brings on a death spiral of debt.

 'Reward themselves' reminds me of my niece, who makes about $23,000 a year. Her and her friends have this mentality that they 'need a break too', and generally spend a lot at restaurants, clubs, and even taking week long trips to Florida. I tell her I can't even afford to do that making 3 times her income! She actually thinks I'm 'bragging' about making $68,000 a year if I mention my own budget. It's insane.

 

And then to really make me want to scream, they will all talk about people on welfare causing so many problems. I tell her, "I've made your car payment and insurance 7 times this past year! You're on welfare too!" lol

 

But the real crime is anyone give those girls a credit card.

 

It would be interesting to evaluate debt as a percentage of average income, throughout history. With so many incomes in a household, just to make ends meet... I would gather that debt looms a lot larger - as a percentage of income - than ever before.


 You'll love this article I have bookmarked: https://www.fool.com/investing/2017/08/13/5-figures-that-define-the-middle-class.aspx

 

"Though debt for middle-class households hit an all-time high of 140% of annual household income in 2010, the 122% of debt relative to annual household income that middle-class households are lugging around as of 2013 still isn't good. Comparatively, this is also nearly double the debt burden that middle-class families were contending with in 1989."

27 FICO Scores + 3 VS3. MTG (Mortgage), AUT (Auto), and BKC (Bankcard) are scores 5,4, and 2 from the top.

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Message 5 of 22
Frequent Contributor

Re: Avg. American Household Has $8,284 in Credit Card Debt

Thanks for that article. Good information.

 

Here's a good update on the total household debt numbers. Debt is up to 136k per household.

 

https://www.nerdwallet.com/blog/average-credit-card-debt-household/

Message 6 of 22
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Re: Avg. American Household Has $8,284 in Credit Card Debt


@trusty wrote:

Thanks for that article. Good information.

 

Here's a good update on the total household debt numbers. Debt is up to 136k per household.

 

https://www.nerdwallet.com/blog/average-credit-card-debt-household/


Very interesting information. A lot of debt floating around. Scary ... Smiley Surprised

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Message 7 of 22
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Re: Avg. American Household Has $8,284 in Credit Card Debt


@Dinosaur wrote:

@trusty wrote:

Thanks for that article. Good information.

 

Here's a good update on the total household debt numbers. Debt is up to 136k per household.

 

https://www.nerdwallet.com/blog/average-credit-card-debt-household/


Very interesting information. A lot of debt floating around. Scary ... Smiley Surprised


More debt than income is never good. lol

 

I believe the apt term for that is, underwater. So, basically everyone is underwater, as a group. Not good. Does not compute...

Message 8 of 22
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Re: Avg. American Household Has $8,284 in Credit Card Debt


@CassieCard wrote:

 'Reward themselves' reminds me of my niece, who makes about $23,000 a year. Her and her friends have this mentality that they 'need a break too', and generally spend a lot at restaurants, clubs, and even taking week long trips to Florida. I tell her I can't even afford to do that making 3 times her income! She actually thinks I'm 'bragging' about making $68,000 a year if I mention my own budget. It's insane.

 

And then to really make me want to scream, they will all talk about people on welfare causing so many problems. I tell her, "I've made your car payment and insurance 7 times this past year! You're on welfare too!" lol

 

But the real crime is anyone give those girls a credit card.

Sounds like you are one of her creditors.

 

I know you are just trying to help family, but you are just enabling her.

And I say that as someone that has been at both ends of that stick.

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Message 9 of 22
Established Contributor

Re: Avg. American Household Has $8,284 in Credit Card Debt


@trusty wrote:

Here's a good update on the total household debt numbers. Debt is up to 136k per household.

https://www.nerdwallet.com/blog/average-credit-card-debt-household/

@ Your link is really good too! And WOW @ $420.22 billion in credit card balances carried month to month!

 

It says: "*The credit card debt figures in this chart represent revolving credit card balances — those that are carried from month to month — rather than all credit card balances. Total U.S. credit card outstanding debt stands at $944 billion, which includes both revolving and transacting balances."

 

 

27 FICO Scores + 3 VS3. MTG (Mortgage), AUT (Auto), and BKC (Bankcard) are scores 5,4, and 2 from the top.

New CRADIS contacts, bearing 1 carom 10. Just think of EQ, TU, and EX as Cylon Basestars.

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