Credit Card Debt Survey – Episode #72

Standard and Poor’s Credit Card Debt Survey from October 2008 shows that consumers are using credit cards even more in the credit crisis than they were previously.

Here are the big stats around payment patterns:

• 20% sometimes/always unable to pay balances
  - 14% sometimes, 6% always
• 8% pay less than minimum payment
• 8% pay the minimum payment

Here are the stats around credit card debt and credit limit utilization.

• 3% have $40,000 in debt
• 25% are at credit limit on their primary card, another 20% are near the limit on their secondary card.
• 22% have debt $5000-$20000
• 10% are taking out more cash advances

So what do these stats mean? Too many of us are feeling the pinch. For instance, 1 of 4 of us is maxing out our credit limits on our prieach month. Combine this with news that credit issuers are starting to lower credit limits on consumers, and this is not good news.

Survey Methodology

Standard & Poor’s in partnership with the Ketchum Global Research Network created and administered a 42 question online survey to 1,002 Americans who were at least 18 years old. The survey was fielded between August 20th and August 25th 2008, and tested at the 90% and 95% confidence intervals with a margin of error of +/- 3%. Results are representative of the overall U.S. population. Field work was conducted by M/A/R/C Research.

But is this accurate?

My fear is that since the survey was asked of consumers, that they may have tended to pad their numbers in a positive light. My concern is that as negative as some of the numbers are, they are probably even worse in reality. Why? I’ve done enough research with consumers and they tend to be fearful of being completely honest.