Some interesting consumer credit statistics from 2005

2005 Consumer Statistics

By Sharon Secor

Direct Lending Solutions Staff Writer

Consumer statistics are an important resource in determining the health of the economy as a whole. Often, consumer confidence is quoted as one of the most important factors used by economists in predicting future economic trends. Consumer spending and debt statistics are among the primary factors used to gauge consumer confidence. These statistics are also useful to the individual consumer, offering an overview of the average expenditures and debt levels of their fellow consumers, allowing them a measure by which to judge their own financial health.

Why Consumer Statistics Should Matter to You

Credit ratings are much more important in today’s world than many consumers may realize. Credit scores are assessed for more than simple financial transactions, often factoring into employer’s hiring decisions, insurance rates, and many other details of everyday life. Many of the facts and figures compiled in consumer statistics reports released throughout the year represent factors that are considered in the credit scores of consumers. Knowing your credit rating numbers and how they compare to those of the average consumer is important, and the various consumer statistics can be an invaluable resource in making an accurate comparison.

Federal Consumer Statistics

The Federal Reserve Board compiles a number of statistics on consumer spending habits and debt levels. A variety of reports are released for the use of the economists and the general public, some on an annual basis and others less frequently.

Among those most commonly cited in the evaluation of economic trends is the Federal Reserve Board’s Survey of Consumer Finances. Information for this survey is collected over a period of three years, after which a report is written and released.

For the three year period spanning 2001-2004, changes in family income were reported by this survey. The median value of net worth rose by 1.5 percent, a much smaller gain than in the previous three year period, where median net worth rose 10.3 percent. For families on the bottom 40 percent of the income scale, median wealth declined, while those in higher income brackets saw a gain.

Outstanding debt for families rose during this period by 33.9 percent, considerably more than the 9.5 percent rise of the previous three year period. The average American consumer spent 26 percent of their income on revolving debt payments in 2005 and held seven open credit card accounts with a total credit limit of $12,000. Approximately 10 percent of these consumers carried a balance on their credit card accounts of over $10,000. Approximately 50 percent of consumers used less than 30 percent of their credit card limits, with senior citizens averaging the lowest credit card use at about 13 percent of the available limit.

Credit ratings percentages were reported for 2005 with 40 percent of American consumers scoring in the good to excellent range, 11 percent of those scoring above 800 and the remaining 29 percent with scores between 750 and 799. Poor credit scores, under 620, were reported for approximately 30 million consumers.

Bankruptcy filings were reported at record high numbers in 2005, in excess of 2 million, up from 1,522,967 recorded bankruptcy filings in 2004. According to US Census Bureau Statistics, these numbers indicate that nearly one in every five American households filed for bankruptcy during 2005, a 31 percent increase from the number of filings during the previous year. Changes in the bankruptcy laws spurred a portion of the increase in filings, with consumers rushing to relieve themselves of debt before new regulations were brought into effect.

With the careful evaluation of your personal financial situation in comparison to that of the average American, as demonstrated by consumer statistics, you can gain a new perspective on your level of financial stability. With a good working knowledge of consumer statistics, you can determine just where your debt level and credit scores rank as compared to the typical consumer. If your personal facts and figures do not compare favorably, consumer statistics can give you valuable insight as to the levels you should strive for as you work towards improving your finances for a more secure future.

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