Charts: Credit Card Debt and Household Debt Trends

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Here is an interesting Quartz article by Matt Phillips outlining “the most important change in the US economy since the Great Recession that nobody is talking about”. I don’t know about that, I’ve seen a lot of these charts before. But many include more recent data, and below are a few of the notable ones. (Note the truncated scales on several of the vertical axes.)

The overall theme is that household debt levels appear to be settling at a more sustainable level. Household debt service payments as a percentage of disposable income are at their lowest levels in over 20 years:

(click to enlarge)

Breaking this down a bit, we see that total US credit card debt has been dropping pretty consistently since 2009 and remains lower than 2003 levels:

This next chart adds in home-equity credit lines, auto loans, and student loans. Home equity line of credit (HELOC) debt has also been dropping since 2009. Auto loans have bounced back up recently, while student loans continue their seemingly inexorable climb (!).


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  1. I suppose this is because we’re still convinced education is ‘always worth the investment?’ I don’t know if that’s true, in many cases it isn’t, but I don’t know if I see that trend stopping anytime soon unless higher regulations are put on college tuition. Even then that would likely only reach state schools… who knows how to stop the student loan crisis.

  2. Mr. T agrees, this student loan crisis is going to have huge implications in the next ten to twenty years. I was speaking with a friend recently who had difficulty finding a doctor, and only could find PA’s because you can’t make up the money spent in doctorate school to be a doctor. I said the same in my field of psychology, I finished up my masters and will be getting a license in mental health counseling, but my debt from a masters is to much to continue on to be a full psychologist, the return just isn’t there. It wasn’t just me it was my entire class of 35 all felt the same they couldn’t continue with the debt. We have created a nation that has citizens that are smart enough and want to be doctors, psychologists, or any education and you have to think about it and can’t fulfill your dream because getting a masters alone has set me back at least ten years in paying it off just to be in a field that I enjoy and want to do. My American dream as well as others is an educational quandary.

  3. I know it sounds trite but I believe that college costs can only be contained by a market-based solution and not by more government intervention or regulation.

  4. CC debt line correlates with drop of savings and CD rates. People were paying their 0% credit cards as soon as savings stopped bring profits. I wonder if there is latest charts of savings amounts per capita. That would’be interesting to see.

  5. Debt service payments are down because people are carrying less debt, but they are also down because of the Fed’s zero interest rate policy (and indeed real negative interest rate policy). Rates won’t be zero forever, so even if the level of household debt stabilizes at the current level I would expect payments to increase in the coming years.

  6. Peter, you’re right. It will happen when enough people realize what Krista said in her first statement: that it isn’t “always” worth the “investment”. Suggesting this possibility is sacrilege in many social circles that ironically consider themselves open-minded.

  7. Peter, government isn’t the problem or cause of the costs. Government subsidized public universities heavily, subsidizes loans and provides financial aid. Take away the government and costs would skyrocket and borrowing would be harder and financial aid slashed. It wouldn’t lower costs for sure.

  8. Jim, I never said that the government should get out of the education business. Of course if the government abruptly stopped all loans and aid, there would be a crisis. Things need to change gradually.

    One problem with the government lending is it just as easy to get a loan for an English degree as it is for a Chemical Engineering degree. After 4 years, guess who is going to be able to get a job that will pay off those loans? I’m not saying that English is not an important thing to study, because it is, but the payoff is quite different. A market based correction would result in loans being given relative to the actual payoff ability. Eventually colleges would have to lower the costs of English degrees if they wanted anybody to study English. Right now it seems great that you can get a loan to study English, but the government is doing a disservice by sticking the English majors with a Chemical Engineering degree sized bill once they are graduated and have to pay off their loan.

  9. @jim

    If the government didn’t subsidize loans then a large percentage of the current population currently going to college wouldn’t be able to go. While you can argue over whether this is good or bad, colleges would have less revenue and be forced to spend more efficiently and compete for the lesser supply of students able to go to college. One great way to compete is based on price. (currently they build lavish unnecessary buildings.. fancy dorms, stadiums, etc. to compete for students which doesn’t increase eduation, but serves to jack up the price)

  10. Time to short credit card companies that don’t have a finger in the auto, home loan pies.

    AMEX from 80 to 60 🙂

  11. It seems that it reflect the income inequity. more and more people buy house by cash, buy car by cash and the middle/low income people will not take more debt since the future is not clear.

  12. It is good news, although some economists believe that the economic tide has now turned against us.

    There are interesting social trends that correlate with this drop. For example, in recent times young people in particular have begun
    to shy away from or avoid carrying credit card debt. Also, as a fall out from the great recession, young adults (and some not so young)
    have increasingly remained living with their parents and for longer. In such households, there is an increased financial dependence upon parents.

  13. That student loan number is SCARY!

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