Credit card debt down across the board
A significant percentage of Americans have shed credit card debt since the Great Recession, a trend that applies regardless of age, education or income, a new survey shows.
The FINRA Investor Education Foundation surveyed more than 25,000 adults in its National Financial Capability Study, in three waves. The first came in the throes of the financial crisis in 2009, then as Americans began climbing out of the recession in 2012, and most recently in late 2015.
In 2009 it found that, in every age, education and income bracket, 50 percent or more of the cardholders reported carrying a balance in the previous 12 months, with some groups showing a prevalence as high as 63 percent.
Fast-forward six years, with the recession shrinking in the rearview, and now almost every demographic shows about half – or less – carrying a balance, dropping to 40 percent in some categories. Across the full survey population, those with recent debt dropped from 56 percent in 2009 to 47 percent in 2015.
The biggest outlier showed up in the age cohorts, but not among the youngest cardholders, as might be predicted. Instead, American cardholders age 35-54 – or Generation X – are the most prone to carrying card debt. Although down from 63 percent in 2009, the percent who carried a recent balance was still at 56 percent in 2015.
The dropoff between Gen X and its adjacent generations was significant, with only 46 percent of millennials (age 18-34) and 40 percent of baby boomers (age 55 and older) reporting recent card debt.
The findings on education level indicated that those with a college degree were substantially less vulnerable to card debt. But whether the respondent had only completed high school or some college made little difference in their likelihood to carry a balance.
Similarly, breaking out Americans by household income showed those in the top category – $75,000 or more – as far less susceptible to card debt, while the incidence rates among the low- and middle-income categories were the same.
All flights of the survey were funded by the FINRA Investor Education Foundation and conducted online by Applied Research & Consulting, according to quotas approximating Census-based demographics. Analysis of the card debt data was conducted by George Washington University’s Global Financial Literacy Excellence Center, who released its findings in August.
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