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Strategies & Market Trends : Aardvark Adventures -- Ignore unavailable to you. Want to Upgrade?

To: ~digs who wrote (624)	6/23/2004 7:06:49 PM
From: ~digs	Respond to of 7944

Credit Card Debt In any given month, Americans owe $677 billion to bank credit card issuers, Brits owe $97 billion to bank credit card issuers, and Aussies owe $19 billion to bank credit card issuers. Based on current population figures, Americans owe $2311, the Brits owe $1616, and the Aussies owe $950, for every man, woman and child in their respective countries. There has been some controversy as to whether these figures paint an accurate picture of the gross national credit card debt? Some argue that the total amount owed on credit cards does not represent "real debt." Since a portion of total outstandings are paid-off in full each month, taking advantage of the issuer's interest-free grace period, "real debt" should be much lower than total outstandings. Furthermore, the industry outstanding figure for the US market is somewhat skewed since it includes business credit cards. Using this definition for "real debt, let's recalculate the numbers. Last year, business credit cards racked up $220 billion in volume for the year, for an average of about $18 billion per month. U.S. cardholders charged nearly $1.3 trillion on credit cards during 2003, or about $108 billion per month. Approximately 60% of the $108 billion is paid-off in-full each month. Therefore, "real debt" for U.S. bank credit cards is $594 billion ($677 billion minus $18 billion for business credit cards and minus $65 billion for interest-free consumer credit cards). Based on Bank of England and Reserve Bank of Australia data, interest-accruing credit card balances, or "real debt" is $66 billion for the United Kingdom and $13.5 billion for Australia. Consequently, Americans owe $2,027, the Brits owe $1,100, and the Aussies owe $675 in "real credit card debt," for every man, woman and child in their respective countries, based on current population figures. While it is true that the number of cardholders in the USA, UK, and Australia struggling with credit card debt has been rising over the past three years, the big picture does not look so bleak. Gross credit limits for credit cards in the USA are about $1.5 trillion, which means Americans have only tapped 45% of their available credit lines. In the U.K., aggregate credit limits total $245 billion, for 40% credit line utilization. Down under, gross credit limits total $50 billion, for 38% credit line utilization. But wait, there's more. The figures discussed so far do not include retail credit cards such as store credit cards and gas credit cards. CardWeb.com is still gathering retail card information for 2003. But Americans owe an estimated $78 billion on retail credit cards, or about $266 for every man, woman and child in the USA. Therefore, Americans' "real, real gross national credit card" is approximately $2,293 per person, $3,632 per cardholder, about $6,400 per household, or roughly $8,000 per carded household (those with at least one credit card). cardweb.com