The Truth About the Average American’s Credit Card Debt
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Everyday people hear about how all Americans owe thousands of dollars in credit card debt. These rumors are distributed through the media, government, bank officials, and many other people. They all say the same thing. That a trend is growing of Americans increasing in credit card debt. However if you break down the statistics that everyone talks about you can see the truth about credit card debt.
The most over used and over rated statistic states that each American has more than $8,000 in credit card debt. The statistic is only true if you’re taking the average credit card debt among the people that have credit cards. However this is usually a big misconception as the word average is often easily confused. Many people believe that they arrived at this number by dividing the credit card debt among everyone. However this couldn’t be further from the truth. They only used the number of Americans that have credit cards which leaves out a huge number of Americans in the averaging factor.
The truth is that 1 in 20 American households actually have more than $8,000 in credit card debt. This is because many families don’t even have credit cards. Another huge chunk of American families pay off their credit cards as soon as they get the bill and thus don’t even owe anything to the credit card companies even though they have credit cards. Out of the remaining families only a very few owe $2,000 or more in credit card debt. Thus you can see that the “average American household” number is deceiving.
You may be curious why this is. In reality it’s very simple. It’s due to how they came up with their number for the average American’s debt. They took the outstanding credit card debt that is owed which is $750 billion and divided it by the number of American households that have a minimum of 1 credit card. This is approximately 84 million households. Thus they arrived at $8,000 per household.
However this number is very deceiving as they didn’t even factor in the number of Americans that don’t have credit cards. By doing this they eliminated 23.8% of American households in their calculations. This is a huge factor if you’re trying to get the average American credit card debt for all Americans. Another 31.2% of American households pay off their bills as soon as they get them. Thus altogether 55% of all American households owe no credit card debt.
Out of the 45% 29% have $1,000 or more in credit card debt, 21% of households owe $2000 or more, 4% owe $10,000 or more, and 1% owe $21,000 or more. These numbers show that 26% of the American people carry all of the debt that is owed for debt that is $2,000 or more. American households owe very little to credit card companies. Most of the households that due have credit card debt have less than $1,000. The truth is that most of the American people are not in credit card debt and nowhere near the rumored numbers.
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