The latest AARP Bulletin--my vote for Most Depressing Magazine in America because it's always full of bad news about helpless and naive elderly people being ripped off and pushed around--the latest AARP Bulletin claims that the average American family today has over $15,788 in credit card debt.
Huh? Last time I checked, it was around $9,000, and rising about $1,000 per year. Not good, and the trend was terrible, but way different from 15k. Since then, we've entered the Great Recession, which in theory would have made the trend lower. Except for people who lost jobs and then had to live on their credit cards. Something must have changed to get the whopping 15k figure.
I Googled the concept. Money-zine.com quotes Federal Reserve stats of $5,100, but says stats are hard to come by as there is no official national way of measuring.
Credit cards.com has the same $15,788 as the AARP. Here's how they got that figure:
"Calculated by dividing the total revolving debt in the U.S. ($852.6 billion as of March 2010 data, as listed in the Federal Reserve's May 2010 report on consumer credit) by the estimated number of households carrying credit card debt (54 million)."
I'm not feeling the believability factor here, especially since in the last two years we've gone from a nation of spenders to a nation of savers, in a big way. Our savings rate is over 3%, up from levels variously calculated at zero or even less. You can see from the spike that the savings rate went way, way up in early 2009, after the market tanked and while we were still receiving bad economic news on a seemingly daily basis. People socked away 5% then. Unfortunately, we appear to be saving less now. Still, where does the $15,788 come from?
I checked out my old pal, Suze Orman, who doesn't serve up the current estimate for household credit card debt but does say the total we now owe is over $900 billion. Yikes. That's over $16,666 in debt per household. Unless more households are in debt.
Sometimes these numbers are like the total fifths of whiskey I supposedly consume per year. Since I don't drink, somebody else must be doing more than their share. I'm guessing that some households are deeply in credit card debt (that's an easy guess, isn't it?), while others are happily without any.
The big question is, which are you? The statistical person with about $5,100 in credit card debt--enough to make you a bit uncomfortable but not terribly alarmed, or the construct household with $15,788--which after all is $7,894 per adult in a two-person family, not exactly chump change--who is beginning to feel seriously pinched?
And what can you do about it today? Because you know this debt thing is a big, ugly weight that's only likely to get bigger, unless you change something about how you spend money. That's all. You make a change, and the situation changes. As we can see from that teeny tiny chart from the Department of Commerce, when there's a will, the financial picture can change quite dramatically in a hurry. I wonder if today is the day you make a change?