Credit Card Statistics

Here are some credit card statistics and credit score statistics by the numbers

• 1. The average consumer has had only 1 credit inquiry on his or her accounts within the past year. (Source: myfico.com)
• 5%. typical family’s credit card balance as a percent of their annual income. The median U.S. household income is currently $43,200. (Source: Federal Reserve)
• 5% of consumers had credit histories shorter than two years. (Source: myfico.com)
• <6% percent had four or more inquiries resulting from a search for new credit. (Source: myfico.com)
• 8.3% of households owe $9,000 or more on their cards (Source: MSN Money)
• 10% have more than 10 credit cards in their wallets. However, the overall average number of credit cards per consumer is four. (Source: Experian’s “National Score Index”)
• 10% of American Express cardholders are seeing a credit limit reduction in 2008.  Up from 4% in 2007.
• 13. Consumer has on average a total of 13 credit obligations on record at a credit bureau. These include credit cards (such as department store charge cards, gas cards or bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.). Not included are savings and checking accounts (typically not reported to a credit bureau). Of these 13 credit obligations, nine are likely to be credit cards and four are likely to be installment loans. (Source: myfico.com)
• 13.38% is the average interest rate on credit cards in 2007 (Source: Federal Reserve).
• 14 years old is the average age of a consumer’s oldest obligation (Source: myfico.com)
• ~14% of Americans use 50 percent or more of their available credit, and this group carries an average of 6.6 credit cards (Source: Center for Media Research)
• ~14% are using 80 percent or more of their credit card limit. (Source: myfico.com)
• ~15% have total card balances in excess of $10,000. When you look at the total of all credit obligations combined (except mortgage loans), 48 percent of consumers carry less than $5,000 of debt. This includes all credit cards, lines of credit, and loans-everything but mortgages.
• 17% of families with credit cards pay only the minimum due every month. (Sources: American Bankers Association, Federal Reserve)
• 17% of people know their credit score before they turn 21 years old (Source: VISA)
• <20% have ever had a loan or account closed by the lender due to default. (Source: myfico.com)
• 23% increase over the past five years in the number of credit cardholders who use cards that accumulate points for merchandise and/or airline tickets. (Source: Vertis)
• 25% had credit histories of 20 years or longer. (Source: myfico.com)
• 25% of potential employers check credit reports sometimes, 20% check all the time (Source: Society of Human Resource Professionals)
• 25% of credit reports have credit score impacting errors (Source: Public Interest Research Group)
• 29% of low and middle income households with credit card debt reported that medical expenses contributed to their current balances. (Source: www.demos.org)
• 33% have been 60 or more days overdue on any credit obligation. (Source: myfico.com)
• 33% of consumer purchases in the United States is made with a payment card—including credit, debit, and prepaid products. (Source: Visa USA)
• 33% of adults admit to “financial infidelity” (Redbook)
• ~37% carry more than $10,000 of non-mortgage-related debt as reported to the credit bureaus. (Source: myfico.com)
• ~40% of credit card users paid their balance in full each month in 2006 (Source: Federal Reserve Bank of Philadelphia).
• ~40% of credit card holders carry a balance of less than $1,000 (Source: myfico.com)
• <50% been reported as 30 or more days late on a payment.(Source: myfico.com)
• >50% of U.S. households have no credit card debt. ~25% have no credit cards, and an additional 30% of households pay off their balances every month. (Source: Federal Reserve)
• >50% use less than 30 percent of their total credit card limit. (Source: myfico.com)
• 50% of consumers are satisfied with their primary credit card (Source: GfK Roper Survey)
• 50% of student carry a balance on their credit cards (Source: Public Interest Research Group)
• 51% of the US population has at least two credit cards (Source: Center for Media Research)
• 57% of people use money to control their partner (Harris Poll)
• 58% Low interest rate is by far the most important factor when choosing a new credit card, cited by 58 percent of respondents (Source: GfK Roper Survey)
• 77% of all consumers have never had a loan or account that was 90+ days overdue
• 80% of high school seniors got no financial literacy classroom training in high school (Source: JumpStart Coalition for Personal Finance)
• 88% of consumers surveyed admitted to immediately shredding or simply throwing out credit card offers they receive in the mail (Source: GfK Roper Survey)
• $2,200. Of the households that do owe money on credit cards, the median balance — meaning half owe more, half less. (Source: MSN Money)
• $19,000. Amount of average credit available on all credit cards combined. (Source: myfico.com)
• $23,000. Amount of average credit card debt for a recent college graduate (Source: VISA)
• 1 billion Visa cards worldwide—more than 450 million of those cards are in the United States (Source: Visa USA)
• $963 Billion Total US consumer revolving debt declined to $963 Billion in Dec 2008 (Source: Federal Reserve).
• $1 trillion in annual volume conducted by U.S. Visa cardholders (Source: Visa USA)
• $2.587 Trillion Total US consumer debt (which includes installment debt, but not mortgage debt) reached in July 2008 (Source: Federal Reserve)

Peer to Peer Lenders and Credit Scores – Episode #71

Peer to Peer lending can impact your credit scores. First, let’s define peer to peer lending. Think of it like an eBay for lending. It’s a marketplace of personal lenders and borrowers who then bid on a personal loan. There are no big companies lending here. Borrowers, people like you and me, state their reason for the loan and the peer-to-peer company pulls their Experian Scorex PLUS credit score to assess their risk. Lenders, people like you and me, then compete for the opportunity to lend.

Like big mortgage and auto lenders: Most of them want to see a 760 Credit Score or higher for the best rates.

Three companies that offer peer-to-peer lending are Prosper.com, Zopa.com and LendingClub.com. Prosper.com is the largest most trafficked site and according to compete.com has over 700,000 visitors each month. But, do they report performance to the credit bureaus?  According to their website:

Prosper communicates repayment and delinquency information to credit reporting agencies. Your credit score will be adjusted accordingly, based on your loan payment performance.

For many borrowers, taking a loan through Prosper is a great opportunity to improve their credit score, which can lead to better loan rates in the future.

This has become a new way to get a personal loan that will impact your credit score. So how’s it working?

Zopa has closed down it’s US offering and now only offers its service in Japan, Italy and Great Britain.

For Prosper, an equally daunting speedbump as occurred:

…the nation’s largest peer-to-peer lending site, San Francisco-based Prosper, stopped allowing lenders to make new loans, saying it needed to wait while the Securities and Exchange Commission evaluated its regulatory filings.

Monthly loan volumes at the company have been declining since the credit crisis worsened this spring. Prosper, which is unprofitable after raising $40 million in venture capital, now faces the damaging possibility that lenders may take their money off the site instead of waiting for the S.E.C. to allow lending to resume. That could take several months.

“Regulatory agencies seem to want to make sure they have all this understood before it gets too big,” said Jim Bruene, editor of the Online Banking Report. “This is definitely going to slow peer-to-peer lending down.” -NYTimes, Oct. 15, 2008

Conclusion: this category of loans has hit some hurdles, but keep an eye out for it as an alternative in the future. I’m still a proponent of shopping around. If you need a personal loan, talk to your bank and compare rates on these peer to peer sites and see which gives you the best deal.

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