2011 Credit Card Debt Study

CardHub-2011-Credit-Card-Debt-StudyThe hope heading into 2011 was that consumer spending and payment habits would more closely mimic 2009, a year that saw credit card debt levels fall roughly $11.6 billion, than 2010, which began with a significant first-quarter paydown yet concluded with a net increase of $8.1 billion in credit card debt.  Returning our focus to debt reduction in 2011 would have turned its predecessor into an aberration, thereby signaling that card users had learned valuable lessons from the struggles of the Great Recession.  Unfortunately, the narrative ended up being quite different, as we ended the year with $47.8 billion in new credit card debt – 424% more than we incurred in 2010.  In fact, we displayed worse credit management in every quarter of 2011 relative to the same timeframe in 2010.

Credit card debt levels therefore indicate that we, as a society, are once again headed down a dangerous path, despite the economy’s continued recovery.  Simply put, it seems that we have a societal addiction to debt.  The only cure will be to redefine what we consider luxuries and necessities as well as to improve our overall financial literacy.  It will be quite interesting to see how we adjust heading into 2012.

For more detailed information about how credit card debt levels changed on a quarterly basis in 2011, see below:

 Year-End Results

By the Numbers:

  • Net Result in Debt Load: + $47,842,874,800
    • Relative to 2010: + 424%
    • Relative to 2009: + 577%
  • Outstanding Credit Card Debt: + $3,626,000,000
  • Credit Card Charge-Offs: $44,216,874,800

Commentary:

One might look at the $3.6 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 $44.2 billion of credit card debt that Americans defaulted on.  In fact, during 2011 Americans accumulated an additional $47.8 billion in credit card debt, which represents a very worrisome increase of 424 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.

Q1 Main Findings

By the Numbers:

  • Net Result in Debt Load: - $32,864,260,800
    • Relative to Q1 2010: - 25%
    • Relative to Q1 2009: - 30%
  • Outstanding Credit Card Debt: - $45,158,000,000
  • Credit card Charge-Offs: $13,293,739,200

Commentary:

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 around $32.8 Billion of credit card debt in Q1 of 2011. This pay down, however, is 25 percent less than what consumers paid down a year ago and 30 percent less than what they paid down on the same quarter two years ago.

Q2 Main Findings

By the Numbers:

  • Net Result in Debt Load: + $18,309,178,300
    • Relative to Q2 2010: + 65%
    • Relative to Q2 2009: + 366%
  • Outstanding Credit Card Debt: + $7,546,000,000
  • Credit Card Charge-Offs: $10,763,178,300

Commentary:

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 $18.3 billion, which is 65 percent higher than the increase observed in the same quarter one year ago and 366 percent higher than the increase observed two years ago.

Q3 Main Findings

By the Numbers:

  • Net Result in Debt Load: + $16,921,762,900
    • Relative to Q3 2010: + 156%
    • Relative to Q3 2009: + 59%
  • Outstanding Credit Card Debt: + $5,978,000,000
  • Credit Card Charge-Offs: $10,943,762,900

Commentary:

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 $16.9 billion, which is 156 percent higher than the increase observed in the same quarter last year and 59 percent higher than the increase in the same quarter two years ago.

Q4 Main Findings

By the Numbers:

  • Net Result in Debt Load: + $45,476,194,400
    • Relative to Q4 2010: + 30%
    • Relative to Q4 2009: + 101%
  • Outstanding Credit Card Debt: + $36,260,000,000
  • Credit Card Charge-Offs: $9,216,194,400

Commentary:

In Q4 of 2011, when the $9.2 billion write-off is considered, outstanding credit card debt went up by over $45 billion. This is 30 percent more debt accumulation than was accumulated in this quarter last year and a whopping 101 percent more than was accumulated two years ago.

Data & Graphs

Net Result of Consumer Credit Card Debt Q1 2009 – Q4 2011

Net Result in Debt Load Relative to Same Period Last Year Relative to Same Period 2 Years Ago
2011 + $47,842,874,800 + 424% + 577%
Q4 2011 + $45,476,194,400 + 30% + 101%
Q3 2011 + $16,921,762,900 + 156% + 59%
Q2 2011 + $18,309,178,300 + 65% + 366%
Q1 2011 - $32,864,260,800 - 25% - 30%
2010 + $9,136,106,350 + 191%
Q4 2010 + $34,999,694,500 + 54%
Q3 2010 + $6,612,537,750 - 38%
Q2 2010 + $11,090,851,100 + 182%
Q1 2010 - $43,566,978,000 - 8%
2009 - $10,018,099,00
Q4 2009 + $22,655,836,000
Q3 2009 + $10,643,657,500
Q2 2009 + $3,929,319,800
Q1 2009 - $47,246,912,300

Net Result in Debt LoadGreen 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 PeriodGreen indicates that consumers either paid down more debt or accumulated less debt than they did in same quarter in 2010 and 2009. Red indicates that they either paid down less debt or accumulated more debt than they did in the same quarter in 2010 and 2009.

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
2011 $830.4 $813.8
Q4 2011 $830.4 $813.8 4.53% $9.2
Q3 2011 $793.4 $777.5 5.63% $10.9
Q2 2011 $787.4 $771.7 5.58% $10.8
Q1 2011 $779.6 $764.0 6.96% $13.3
2010 $826.7 $810.2 $75.1
Q4 2010 $825.7 $810.2 7.70% $15.6
Q3 2010 $806.9 $790.8 8.55% $16.9
Q2 2010 $817.4 $801.1 10.97% $22.0
Q1 2010 $828.5 $811.9 10.16% $20.6
2009 $894.0 $876.1 $83.2
Q4 2009 $894.0 $876.1 10.12% $22.2
Q3 2009 $893.5 $875.6 10.1% $22.1
Q2 2009 $905.2 $887.1 9.77% $21.6
Q1 2009 $923.3 $904.8 7.62% $17.2
Q4 2008 $989.1 $969.3

(Source: CardHub.com, Federal Reserve)

Other Years’ Studies

 * 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.

Previous Chargeback Policy Report   March Madness Credit Card Matchup Next

Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.