The Fed's most recent Survey of Consumer Finances was released earlier this week, and in spite of all the negative reports concerning shrinking incomes and net worth, it actually contained some tidbits of positive news regarding credit card debt. They're hard to find among all the other depressing information, but hey, I'll take what little good news we get these days! If you follow the link above and scroll towards the end of the report, you will come across a section entitled "Credit Card Balances and Other Lines of Credit" on page 66. This is where we find the following 3 important stats:
1.) Fewer Households Carry Credit Card Balances
Compared to the last study done in 2007 before the recession, 6.7% fewer families said they had at least one credit card with a balance on it. That pegs 2010's number at 39.4% of families, which is quite a large improvement over the percentage carrying credit card balances in 2007.
2.) Size of Credit Card Balances Has Shrunk
For those families carrying balances on their credit cards, the mean balance dropped 7.8% to $7,100. The median balance also fell 16.1% to $2,600, which means that despite the progress we've seen, there's still many Americans out there carrying large amounts of credit card debt. If there weren't, the mean balance wouldn't be substantially higher than the median.
3.) 45% of Families Using Credit Cards Don't Carry Balances
This is the stat I really like to look for every time the Fed releases a new survey. What it tells us is that among all the households that use credit cards, more than half are still carrying balances from month to month. The good news is we're making progress, because the 2007 report concluded that 61 percent of families still carried balances. However, we've got to do much better. I was hoping this year's Survey of Consumer Finances would finally show there are more families using credit cards that don't carry balances than those that do.
Obviously, we're not quite there yet, but we're getting close! At least the trend is moving in the right direction for the Fed's next report. Now we'll just have to wait until 2015 to find out if that trend can continue. Photo by Paalia