Q3 2012 Credit Card Debt Study

Net Result of Consumer Credit Card Debt Q1 2009 – Q3 2012

	Net Result in Debt Load	Relative to Same Period Last Year	Relative to Same Period 2 Years Ago
Q3 2012	+ 14,145,276,115	- 14%	+ 128%
Q2 2012	+$17,705,469,864	- 9%	+ 73%
Q1 2012	- $35,480,557,415	+ 6%	- 9%
2011	+ $46,731,182,471	+ 526%	+ 4,761%
Q4 2011	+ $44,324,767,621	+ 48%	+ 97%
Q3 2011	+ $16,494,140,290	+ 166%	+ 36%
Q2 2011	+ $19,389,961,542	+ 90%	+ 103%
Q1 2011	- $33,477,686,982	- 14%	- 26%
2010	+ $7,465,488,461	+ 845%
Q4 2010	+ $29,950,945,666	+ 33%
Q3 2010	+ $6,207,943,058	- 49%
Q2 2010	+ $10,229,102,864	+ 7%
Q1 2010	- $38,922,502,127	- 14%
2009	- $1,002,696,106
Q4 2009	+ $22,546,097,501
Q3 2009	+ $12,138,970,515
Q2 2009	+ $9,559,638,525
Q1 2009	- $45,247,402,647

Net Result in Debt Load – Green indicates that consumers decreased their debt relative to the previous quarter. Red indicates they increased their debt relative to the previous quarter. Relative to Same Period – Green indicates that consumers either paid down more debt or accumulated less debt than they did in same quarter in 2011 and 2010. Red indicates that they either paid down less debt or accumulated more debt than they did in the same quarter in 2011 and 2010.

Consumer Credit Card Debt and Charge-off Data (in Billions):

	Outstanding Revolving Consumer Debt	Outstanding Credit Card Debt	Quarterly Credit Card Charge-Off Rate	Quarterly Credit Card Charge-Off in Dollars
Q3 2012	$822.4	$805.9	3.83%	$7.7
Q2 2012	$815.8	$799.5	4.24%	$8.5
Q1 2012	$806.4	$790.3	4.38%	$8.7
2011	$851.4	$834.4		$45.5
Q4 2011	$851.4	$834.4	4.53%	$9.4
Q3 2011	$815.9	$799.5	5.63%	$11.3
Q2 2011	$810.5	$794.3	5.58%	$11.9
Q1 2011	$802.0	$786.0	6.96%	$13.7
2010	$850.2	$833.1		$77.7
Q4 2010	$850.2	$833.1	7.70%	$16.0
Q3 2010	$836.0	$819.2	8.55%	$17.5
Q2 2010	$847.5	$830.5	10.97%	$22.8
Q1 2010	$860.3	$843.1	10.16%	$21.4
2009	$921.9	$903.4		$85.6
Q4 2009	$921.9	$903.4	10.11%	$22.8
Q3 2009	$922.2	$903.7	10.10%	$22.8
Q2 2009	$933.1	$914.4	9.77%	$22.3
Q1 2009	$946.1	$927.2	7.62%	$17.7
2008	$1,010.3	$990.1

(Source: CardHub.com, Federal Reserve)

Q3 2012

By the Numbers:

In Q3 of 2012, outstanding credit card debt increased relative to Q2 2012: $6,428,359,000
In Q3 2012 the credit card charge-off rate in dollars was: $7,716,917,115
Net Result in Debt Load: $14,145,276,115 increase
Relative to Q3 2011: 14% less than the increase in the same quarter in 2011
Relative to Q3 2010: 128% more than the increase in the same quarter in 2010
Relative to Q3 2009: 17% more than the increase in the same quarter in 2009

Main Findings:

While credit card debt increased relative to Q2 2012, the $14.1 billion we added to our tab is 14% less than we incurred during the third quarter of 2011.
Q3 2012 marks the third consecutive quarter in which consumers have displayed improved credit card performance relative to the respective quarter the year before – the first time that has happened in at least three years.
While the pace at which we’re incurring credit card debt is obviously slowing, consumers must reverse course rather than merely head the wrong way slower.
Banks charged off on more than $7.7 billion in credit card debt during Q3 2012.
At 3.83%, the charge-off rate is lower than it’s been since the second quarter of 2006.
The average U.S. household has $6,747 in credit card debt.
Projection: U.S. consumers are now expected to add $36.3 billion in credit card debt during 2012.

Q2 2012

In Q2 of 2012, outstanding credit card debt increased relative to Q1 2012: $9,230,600,400
In Q2 2012 the credit card charge-off rate in dollars was: $8,474,869,464
Net Result in Debt Load: $17,705,469,864 increase
Relative to Q2 2011: 9% less than the increase in the same quarter in 2011
Relative to Q2 2010: 73% more than the increase in the same quarter in 2010
Relative to Q2 2009: 85% more than the increase in the same quarter in 2009
CONCLUSION: As was the case in the previous 3 years, consumers started reversing any debt pay down from the first quarter with a net increase in credit card debt in the second quarter. What is worrisome about 2012 is that it is shaping up to be a very similar year to 2011, a year in which credit card debt increased by more than $46.7 billion. While the staggering increase of over $17.5 billion in credit card debt in Q2 2012 is 9 percent less than the increase a year ago, the Q2 2012 increase has wiped out almost 50 percent of the Q1 2012 decrease. In addition the Q2 2012 increase is 73 percent more than the increase observed in the same quarter two years ago and 85 percent more than the increase three years ago.

Q1 2012

In Q1 of 2012, outstanding credit card debt decreased relative to Q4 2011: $44,134,182,400
In Q1 2012 the credit card charge-off rate in dollars was: $8,653,624,985
Net Result in Debt Load: $35,480,557,415 decrease
Relative to Q1 2011: 6% more than the decrease in the same quarter in 2011
Relative to Q1 2010: 9% less than the decrease in the same quarter in 2010
Relative to Q1 2009: 22% less than the decrease in the same quarter in 2009
CONCLUSION: As was the case in the previous 3 years, consumers actually paid down their credit card debt in a big way during the first quarter of this year. Consumers actually paid down around $35.5 billion of credit card debt. While this pay down is 6 percent more than it was in 2011, it is 9 percent less than what consumers paid down a year ago and 22 percent less than what they paid down three years ago.

2011

In 2011, outstanding credit card debt increased relative to its level in 2010: $1,270,942,400
In 2011 the credit card charge-off rate in dollars was: $45,460,240,071
Net Result in Debt Load: $46,731,182,471 increase
Relative to 2010: 526% more than the increase relative to 2010
Relative to 2011: 4,761% more than the increase relative to 2009
CONCLUSION: One might look at the $1.3 billion increase in outstanding credit card debt, together with the fact that credit card defaults came down by more than 40 percent, and come to the conclusion that 2011 was a healthy year when it came to credit card debt. The truth is that most of the real debt increase is masked by the $45.5 billion of credit card debt that Americans defaulted on. In fact, during 2011 Americans accumulated an additional $46.7 billion in credit card debt, which represents a very worrisome increase of 526 percent relative to 2010. As in 2009 and 2010, the only quarter in 2011 that Americans actually paid down their debt was the first quarter of the year.

Q4 2011

In Q4 of 2011, outstanding credit card debt increased relative to Q3 2011: $34,874,966,000
In Q4 2011 the credit card charge-off rate in dollars was: $9,449,801,621
Net Result in Debt Load: $44,324,767,621 increase
Relative to Q4 2010: 48% more than the increase in the same quarter in 2010
Relative to Q4 2009: 97% more than the increase in the same quarter in 2009
CONCLUSION: In Q4 of 2011, when the $9.5 billion write-off is considered, outstanding credit card debt went up by over $44 billion. This is 48 percent more debt accumulation than was accumulated in this quarter last year and a whopping 97 percent more than was accumulated two years ago.

Q3 2011

In Q3 of 2011, outstanding credit card debt increased relative to Q2 2011: $5,240,550,000
In Q3 2011 the credit card charge-off rate in dollars was: $11,253,590,290
Net Result in Debt Load: $16,494,140,290 increase
Relative to Q3 2010: 166% more than the increase in the same quarter in 2010
Relative to Q3 2009: 36% more than the increase in the same quarter in 2009
CONCLUSION: For the first time in 2 years, consumers in 2011 reversed the net pay down from Q1 as early as Q3. As in Q2 2011, what is worrisome about this year is that the debt in Q3 shows a staggering increase of around $16.5 billion, which is 166 percent higher than the increase observed in the same quarter last year and 36 percent higher than the increase in the same quarter two years ago.

Q2 2011

In Q2 of 2011, outstanding credit card debt increased relative to Q1 2011: $8,309,420,000
In Q2 2011 the credit card charge-off rate in dollars was: $11,080,541,542
Net Result in Debt Load: $19,389,961,542 increase
Relative to Q2 2010: 90% more than the increase in the same quarter in 2010
Relative to Q2 2009: 103% more than the increase in the same quarter in 2009
CONCLUSION: As was the case in the previous 2 years, consumers started reversing any debt pay down from the first quarter with a net increase in credit card debt in the second quarter. What is worrisome about 2011 is that the debt in Q2 2011 is a staggering increase of almost $19.4 billion, which is 90 percent higher than the increase observed in the same quarter one year ago and 103 percent higher than the increase observed two years ago.

Q1 2011

In Q1 of 2011, outstanding credit card debt decreased relative to Q4 2010:$47,153,993,600
In Q1 2011 the credit card charge-off rate in dollars was: $13,676,306,618
Net Result in Debt Load: $33,477,686,982 decrease
Relative to Q1 2010: 14% less than the decrease in the same quarter in 2010
Relative to Q1 2009: 26% less than the decrease in the same quarter in 2009
CONCLUSION: As was the case in the previous 2 years, consumers actually paid down their credit card debt in a big way during the first quarter of this year. Consumers paid down almost $33.5 billion of credit card debt. This pay down, however, is 14 percent less than what consumers paid down a year ago and 26 percent less than what they paid down on the same quarter two years ago.

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* Some of the numbers may differ from study to study as a result of the Federal Reserve updating certain numbers for several months after first publishing them. For questions or more information regarding this study, please contact our media department.