The average debt ratio across the country does not tell the whole story of the larger debt crisis facing the United States in 2011. Debt impacts different economic groups differently. In some cases, the wealthiest segments of the population may be less affected by debt than those with lower incomes. College graduates are particularly hard hit, because a person's total debt when leaving college often is greater than an average starting salary.
Total Consumer Debt Ratio
The Federal Reserve reported the average total household debt service ratio (DSR) in the United States in 2010 was 11.9 percent, according to the Money-Zine website. This means most consumers have debts -- including mortgages, car payments and lines of credit -- that occupy about 12 percent of their total income. Most financial institutions consider a debt ratio higher than 30 percent a risk in terms of consumers' ability to repay personal loans and other extensions of credit, according to Bankrate's website.
Financial Obligations Ratio
The financial obligations ratio (FOR) includes a broader spectrum of consumer debts including home insurance, property taxes and car lease payments. As of December 2010, the FOR ratio for homeowners across the country stood at 15.27 percent for homeowners and 23.99 percent for renters according to Money-Zine's website. Nationally, the average FOR ratio for all groups during this period was 16.78 percent. The data indicate renters pay a larger portion of income toward total debts than homeowners across the country.
Credit Card Debt Per Household
Credit card debt plays a large part in the total debt of households across the United States. According to debt management firm Consolidated Credit Counseling Services, as of May 2010, the average household carried $15,788 in credit card debt. About 40 percent of credit card holders across the country carried an average total credit card debt of less than $1,000, while about 15 percent carried credit card balances higher than the national average. The average consumer in the United States has access to over $19,000 in credit card funds, according to Consolidated Credit Counseling Services.
College Student Debt
The rising costs of higher education have led to a spike in the average debt college students carry after graduation. Consolidated Credit Card Services reports the average credit card debt for undergraduates across the country was $3,173 as of April 2009. This combines with the average total student loan debt of $24,000 in 2009, according to CNN, to give college students an average total debt of close to $30,000 at graduation. This total debt often eclipses the starting salary of entry-level positions and gives graduates a negative net worth. This makes it increasingly difficult to secure new credit to purchase items such as a car or home loan.
0 comments:
Post a Comment