10 Interesting Facts about Credit Card Usage in the U.S.

Tuesday September 15, 2009

10 Interesting Facts about Credit Card Usage in the U.S.

A crippled housing market, record job losses, and a dragging recession have actually done wonders for the relationship Americans have with their credit cards. In short, they're using them less.

A recent study from the U.S. Federal Reserve shows American consumers are being the most frugal they've been since 1943, during the middle of World War II. They've scaled back their spending on credit by a whopping 21.6 billion USD in just two months. 6.1 billion of this amount is due to reduced credit card spending.

Here are 10 more interesting statistics to give you an idea of the current American credit market:

• Despite the decreased reliance on credit, Americans still carry 2.47 trillion USD of personal debt (this figure doesn't even include mortgages). Consumers owe about $1 trillion of this amount to credit card companies. The good news is that this is actually a 10.4% decrease from this time last year.
• The jobless rate hovers around 10% in America, forcing more consumers to depend on their credit cards for necessities as household income dries up. In fact, 75% of families report using their credit card as their "emergency fund" for car trouble, medical expenses, or home repairs. 30% report using their credit cards for daily living expenses like groceries, utilities, and mortgage or rent payments.
• The average level of debt for a middle-class American family is $9,827 (out-of-pocket medical expenses account for $2,194 of that, on average).
• The U.S. city that owes the largest percentage of their household income to the credit card companies is Miami, Florida. Citizens in Miami owe an average of 22.6% of their incomes (or 9,797.38 USD) to their creditors.
• Currently, credit card companies expect that 9.8% of credit card accounts are lost causes (that is, those account holders are not going to pay back their debts). This figure has improved slightly from 10.4% in June.
• 13.81% of Bank of America credit card holders have defaulted on their accounts. Chase Bank has experienced a 7.92% default rate, while Wells Fargo has seen an 11.59% default rate.
• Americans are more dissatisfied with their credit card companies than they have been in three years, assigning an average satisfaction rating of only 703 out of 1000, according to a J.D. power report.
• Industry analyst firm R.K. Hammer is estimating that credit card issuers will take in a total of $20 billion in credit card fees from consumers in 2009.
• The American government recently passed the CARD Act, consumer-friendly legislation designed to put a leash on unruly credit card companies. It aims to ban unfair interest rate increases, hidden fees, and other arbitrary penalties that credit card holders have long been suffering.
• A higher credit score than ever is currently needed to qualify for new credit. Americans need at least a 750 FICO score to qualify for a card with a low interest rate.

Carrie Davis is the lead columnist for the SpendOnLife, an online resource dedicated to ensuring readers have the latest and most thorough information on credit reports, debt, and identity theft.

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