American Debt Facts

Debt has always been a problem for mankind.  Years ago, individuals who could not pay their debt were either thrown into debtor’s prisons or made personal slaves or servants.  In fact, if a person died with debt, their children could be sold or held in bondage in order to pay back their father’s debt.  Today, while having too much debt can definitely be stressful and the collection actions frustrating and even humiliating, it doesn't quite compare to being thrown in prison or physically enslaved. However, it can feel like being in bondage. Individuals are often scared to go to the mailbox or answer their phone. Below, will discuss some interesting facts concerning debt, and it's a history in the United States.

• Five years ago, in 2003, 1 in every 73 households filed for bankruptcy. 

• Most households have on average about $8,000 of credit card debt.

• Today, most Americans will see roughly 3,000 advertising messages a day

• Nearly 25% of personal purchases made by Americans are made with individuals using either their debt or credit cards. 

• When individuals make purchases with credit cards it actually ends up costing more than 112% of the original price, then if they would have made the same purchase with cash.

•  Credit card purchases typically take years to pay back, even small purchases.  For example, it might take an individual 22 years to payback a $1000 charge if the only make the minimum payments.

•  More than half of all Americans use their credit cards and are not able to pay all off the balance monthly

• Each year, an American household will pay over $1000 just in credit card interest. 

• There are over one billion credit cards in use in the United States

• 1955 marked the year of the first plastic credit card.  Today, individuals will find that there are 20,000 various credit cards available to individuals who want to use them

•  In the 1930s, most poor, working and middle-class individuals did not have large amounts of debt.  Homes were typically a paid off before the family even moved in. Banks also did not lend money as freely as they do today.  If a family could not afford to buy a home, they typically rented one.  Today most households have more than $14,000 worth of debt, and this is excluding their homes.

The feelings toward debt have changed drastically in this country throughout time. The feelings today concerning debt seem to be a bit more cavalier. The economy encourages purchases made with credit and there are no longer any debtor’s imprisonment or debt related bondage. However, while the bondage may no longer be physical, it still exists. Poor credit scores and stressors caused by creditors wanting to be re-paid can make one’s own home feel like a prison. Many individuals are afraid to answer their phones or open up their mail boxes from fear of correspondence or a call from a creditor.

Many modern day purchases are made using credit. This wasn’t the case 50 or more years ago. People tended to purchase only what they could afford and a family may live in the same house for the entire life because there homes were usually paid off. It hasn’t been until relatively recently, that Americans began to make so many purchases on credit and it has been to our detriment. Many people are crumbling under the weight of too much debt.