fascinating facts about personal debt
Debt. It's been a problem for almost everyone at some
time, from the ancient Greeks to modern movie stars.
Throughout history if you didn't have the drachma,
you literally could be enslaved by your debt, and you'd become the
property of your creditor.
About 200 years after the first Olympic Games, ancient
Greek lawmaker and statesman, Solon, changed that for his countrymen,
outlawing debt bondage and canceling all outstanding debt at that
time -- a highly popular move for those with rash spending habits,
even before credit cards.
Today, many Greeks are wondering if the old
sage will bail them out of the $6 billion in debt the country has
racked up to host the 2004 Olympics. It's estimated it will take
40 years to pay it off, but that's not bad when you consider Montreal
is still paying against its Olympic debt of $2 billion, held 28
If you think those debt numbers are amazing, consider
- Some 1.6 million U.S. households
-- one of every 73 -- filed for bankruptcy in 2003.
- There are roughly 1.2 billion credit cards in use
in the United States.
- The original Diners Club card was issued in 1950
to let businessmen charge meals. It was pasteboard with a list
of the 27 restaurants that accepted it printed on the back. The
first plastic card came out in 1955. Today, there are about 20,000
different cards available in the U.S.
- Studies show the average consumer is exposed to
more than 3,000 marketing messages every day. In the last decade,
it's been estimated, solicitations jumped from 1.52 billion annually
to 4.29 billion.
- Today roughly 24 percent of personal expenditures
in this country are made with credit and debit cards.
- Average per household debt in the U.S., not counting
mortgage debt, is about $14,500 -- especially noteworthy because
before the 1930s, most middle and working class people had no
major debts. Banks would not lend to them; they rented their homes
and if they did own a house, it was paid for as it was being built.
- A typical credit card purchase ends up costing
112 percent more than if cash were used.
- A $1,000 charge on an average credit card will
take almost 22 years to pay, and will cost more than $2,300 in
interest ($3,300 total) -- if only 2 percent minimum payments
- Some 40 percent of American families annually spend
more than they earn.
- About 60 percent of active credit card accounts
are not paid off monthly.
- Average credit card debt among all American households
- Average card debt among people who have at least
one card is $9,205 -- triple what it was in 1990.
- Average personal wealth of a 50-year-old American,
including home equity: less than $40,000.
- A typical American family today pays about $1,200
annually in credit card interest.
- The average interest rate on credit cards is 18.9
- Last year the credit card industry took in $43
billion in card fees.
- Nine of 10 Americans claim credit card debt has
never been a source of worry.
- But 47 percent would refuse to tell a friend how
much they owe.
- Twenty-three percent of Americans admit to maxing
out a credit card.
- Eleven percent of Americans admit card debts went
- Thirteen percent of Americans have been 30 days
late paying credit card bills in the past year.
- The average graduate student has six credit cards
and one in seven owes more than $15,000.
- People using credit cards in fast food restaurants
spend up to 50 percent more than when they pay cash.
- The personal savings rate in the United States
has dropped from 8 percent in the 1980s to just under 2 percent
- Medical debts sink the ship in one of every 20
bankruptcies. Typical health care debt: $25,000. Typical victim:
a senior on a fixed income. Typical scenario: pricey prescriptions
bought on high-interest credit cards.
Paul Bannister is a freelance
writer based in Oregon.