The amount of credit an American recieves each year?

Question

My name is Melanie. I'm 16 years old and in a debate class. If anyone knows the answer...Holla

Answer 1

That ranges from each individual, but the average American has credit card debt of $8,562. This is only credit card debt. Then you have mortgage debt and business debt and car loans that all add to this figure. I don't have any exact figures on these, as credit card debt is what I track the most.

Answer 2

Hey Melanie,

I'm glad to see you taking an interest in economics. Looking at the total amount of debt in $ is not a good way to measure debt. This is because incomes tend to rise over time, just as debt levels tend to rise over time. So, a better measure is to look at the ratio of debt to income. You can compare this measure to past ratios or to the ratios for other countries.

To answer your question, the average ratio of US debt to income is about 150%. You can see from the following chart that this have been increasing rapidly in recent years.

http://www.cepr.net/publications/debt_2004_09.htm