Credit Card Truth
The Truth About Credit Cards
It is often said that the average American has over $8,000 in credit card debt. Credit card debt is made out to be a huge ordeal and something that is a growing problem and threatening to consume our world. This figure has been cited by many in the political world, as well as those in journalism. These individuals say that we are headed for a collapse of our economy very quickly. They have said that consumers, who are already struggling and fighting with major debt, are going to have to stop spending money. They say that once this happens the economy is destined to fail completely.
The interesting thing about this statistic is not the fact that the knowledge is so widely known around the world. It is the fact that this statistic is false and there is no truth to it whatsoever. In truth, the majority of Americans do not owe anything to credit card companies. Those households that do have a balance have one that is around $2,000 or less. There are only approximately 1 out of every 20 households in America that have balances of $8,000 or higher on their credit cards.
The Federal Reserve does a survey every three years that is known as the Survey of Consumer Finances. This study gives a complete account of what Americans own and how much they owe on these things that they own. Most of the information on these high averages for credit card debt comes from a website known as cardweb.com. This site offers a service that tracks the history and trends of credit cards. The problem with this site is that they do not say that the average household has more than $8,000 in credit card debt. What the site really says is that the average debt for American households that have at least 1 credit card is over $8,000.
According to CardWeb, the debt ratio in households that have at least one credit card is on the rise. They say that there is an increasing debt problem within these households. However, anyone that knows anything about averages and numbers knows that averages and statistics do not tell a true tale. If you and a group of friends and family were in a room together, along with people that had very high net worth, the average net worth would be very high. It would not matter that you, your friends, and your family had lower worth; the big guys would increase that average a great deal. This would not be a clear picture of the true average of the group and would not accurately portray the net worth. In all actuality, Americans are very frugal with their money. These averages that are untrue portray an incorrect picture of Americans. We are not nearly as far in debt as we are made out to be. We are actually doing much better than the experts and surveys would have us believe. They want us to think that we are actually much worse off than we are. This is a good way to get peace of mind about the economic state of America. We are not in near as big of trouble as we are being led to believe.