Just What Americans Need, More Personal Debt

GE Capital dangles lure of financing in front of would be furniture buyers...

We all know how much trouble we have with public debt in the United States...but what has happened with private consumer debt?  

As with most topics, different people see it differently...this woman writer is not that bothered about private debt right now at all...

Consumer Debt Statistics

The Role Debt Plays in the U.S. Economy

By Kimberly Amadeo, About.com Guide

Many consumers cut credit cards during the recession. (Photo:Scott Barbour/Getty Images)

See More About

• personal finances
• retail
• regulations
• interest rates
• demand

Updated June 13, 2013

Consumer debt drives the American way of life. The statistics on average consumer debt show how debt increased greatly between 2002-2008. However, during the Great Recession, banks cut back on consumer lending. Then the Dodd-Frank Wall Street Reform Act increased regulations over credit cards, so they tightened credit standards.

How does consumer debt drive economic growth? Debt allows you to buy your home, education, and car without having to save for it. As long as the economy grows, you can pay off this debt more easily in the future. That's because your house grows in value, your education allows you a better-paying job and your car...sorry, your car is just an expense. But at least auto loans create jobs for autoworkers!

There are two main types of consumer debt: revolving debt, like credit cards, and non-revolving debt, like auto loans and mortgages. Both stimulate economic growth.

Credit Card Debt

Consumer debt that's meant to be paid off every month is credit card debt, also known as revolving debt. Credit card debt reached a peak of $1.028 billion in July 2008, an average of $8,640 per household. (Source: Federal Reserve Revised Credit Card Debt Chart)

The recession curtailed credit card debt. It fell more than 10% in each of the first three months of 2009. By April 2011, credit card debt had dropped to a low of $839.6 billion. That's an average of $7,055 of credit card debt per household. (Note: The per household estimate is based on 119 million households, or 308.7 million/2.59 persons per household. Source: U.S. Census, 2010 Data; Average Household Size)

Loans

Loans, such as auto loans, mortgages, or school loans, are a form of consumer debt called non-revolving debt. These loans are usually held for the life of the underlying asset. For a car, it's three to five years, and a home mortgage is usually 15-30 years. These loans can be paid back with fixed interest rates, or variable rates. If the borrower fails to make payments, the bank will usually reclaim the underlying asset.

Of course, the bank can't claim any asset on school loans. For that reason, most school loans are guaranteed by the Federal government. These loans have very low interest rates, to encourage higher education.That's because a more educated workforce leads to a healthier economy, in the long run.

Average Consumer Debt Statistics

Here's the month-by-month blog roll of average consumer debt statistics back to 2006. (Note: These are the figures as released. The Federal Reserve continually revises these figures. See Revisions.)

2013

• April - Households Shun Credit Cards in Favor of Loans
• March - Consumer Credit Up 3.4%
• February - Consumer Credit Jumps 7.9%
• January - Consumer Debt Now $22,720 Per Household

2012

• December - Holiday Shoppers Relied Less on Credit Cards
• November - Americans Took Advantage of Low-Interest Loans
• October - Shoppers Resume Love Affair With Credit Cards
• September - Credit Card Debt Down 4.1%
• August - Consumer Debt Hits New All-time High
• July - Consumers Said "Back Away from the Credit Card"
• June - Credit Card Debt Shrank as Gas Prices Dropped
• May - Why Credit Card Debt Rose 11.2%
• April - Credit Card Debt Dropped
• March - Credit Card, School Debt Up, Signaling Consumer Confidence
• February - School Loans Up, Credit Card Debt Down
• January - Americans Set New Record in School Loans

My Note: I have stopped here because I think you can see what is happening recently...

For the rest of this article, go to

 http://useconomy.about.com/od/demand/a/Average-Consumer-Debt-Statistics.htmhttp://useconomy.about.com/od/demand/a/Average-Consumer-Debt-Statistics.htm