Rising Credit Card Debt

According to Cardtrak, at mid-2001, total credit card debt of consumers had risen to $692.6 billion, up from $285.5 billion at the end of 1994. Data reflect the credit card outstandings on general-purpose cards, i.e., Visa, MasterCard, American Express and Discover cards. A more meaningful figure may be the average amount of this debt per card-holding household. About 70 million U.S. households own at least one general purpose credit card. Consequently, at mid-2001, this credit card debt per American household was $9,900. By comparison, the average household credit-card debt of households was $1,985 in 1990 and $5,832 in 1995. If we assume that 80 percent of this debt incurs interest charges at an average of 15 percent, the average annual payment to service their credit card debt amounts to over $1,100.