Chart: Average Household Credit Card Debt
Credit card debt in the United States is about $15,000. It was $19,000 in 2009. But this applies only to those who have credit card debt: about 46% of households.
What about median household consumer debt? It is under $3,500. Half of the households have more; half have less. And remember: some of those up the debt scale have high incomes.
What about average household consumer debt -- all households? It is about $7,000.
Why has this decline happened? Debt write-off by lenders.
Between 2006 and 2008, credit card debt rose steadily and reached its height in January 2009, six months into the financial crisis, as unemployment soared and defaults began in earnest. From there, average debt loads took a sharply downward trajectory and dipped below 2006 levels in mid-2010. 2011, however, saw the decline in average debt become a plateau, and debt levels have since then hovered above $15,000. There is a broad consensus on why indebtedness rose during the boom years: low interest rates and easy access to credit brought Americans to take on record levels of debt. . . .Why did indebtedness fall in 2009 and 2010? Ideally, debt levels would have fallen because newly frugal Americans paid off their credit card balances. However, a number of not-so-pleasant factors contributed to the decline. In 2010, credit card companies wrote off seriously delinquent debts in earnest, lowering the total amount of revolving credit card debt. The charge-off rate -- the percentage of dollars owed that issuers have written off as uncollectable -- rose to 10.9% in the second quarter of 2010. This represented an increase of over 300% from the first quarter of 2006, when the charge-off rate was only 3.1%. Charge-offs account for a significant portion of the debt reduction.
The graph says it all: between the fourth quarter of 2009 and the fourth quarter of 2010, average household debt fell by $2,722. The speed with which average debt fell indicates that loans were written off, rather than paid off. As a result of those losses, spooked credit card companies tightened their purse strings. Stricter lending standards also contributed to a fall in total credit card debt. Those two factors -- fewer loans, made to more creditworthy consumers -- are troubling, as they speak to a one-off correction rather than an improvement in underlying factors such as increased income or fiscal prudence.
Additional facts are here.