U.S. Households Slip Further Into Debt

Thu Mar 02 2006

WASHINGTON, DC, United States (UPI) -- The U.S. Federal Reserve says the average U.S. household has growing debt and shrinking savings.

Slightly more than 46 percent of all families carry a credit card balance. This is up from 44.4 percent in 2001.

Households are also carrying higher balances; the mean balance is $5,100 compared to $4,400 in 2001, and the median balance is $2,200, compared to $2,000 in 2001.

The typical family`s credit card balance is almost 5 percent of their annual income.

'These households have probably gone through budget shock -- as their balances have risen, the interest rates have also increased every few months and the minimum payment percentage has just increased,' Bill Hardekopf, chief executive of LowCards.com, said Thursday. 'The average APR is now above 13 percent, so carrying that balance is getting very expensive. The average household is paying over $700 per year in interest for credit cards.'