III - Consumer and Business Debt

SAVINGS, INVESTMENT & DEBT OWNERSHIP

CONSUMER AND BUSINESS DEBT

CREDIT MARKET DEBT OUTSTANDING, OWED BY SECTOR, 1998-2007 (1)

($ billions, end of year)

Year	Household sector	Nonfinancial corporate business
1998	$5,920.6	$3,816.1
1999	6,416.2	4,218.1
2000	7,011.4	4,554.7
2001	7,683.2	4,741.2
2002	8,516.1	4,750.2
2003	9,499.5	4,860.3
2004	10,578.2	5,026.0
2005	11,759.2	5,269.6
2006	12,956.1	5,699.8
2007	13,839.7	6,331.0
(1) Excludes corporate equities and mutual fund shares. Source: Board of Governors of the Federal Reserve System, June 5, 2008.

Household debt rose 6.8 percent from 2006 to 2007, compared with 11.1 percent for business debt. Over the 10 years 1998-2007, household debt rose 133.8 percent, compared with a rise of 65.9 percent for business debt.

DEBT GROWTH BY SECTOR, 1998-2007

(Percent change from prior year)

Source: Board of Governors of the Federal Reserve System, June 5, 2008.

The following two charts are based on the Survey of Consumer Finances, undertaken every three years by the Federal Reserve. The 2007 survey is currently being conducted.

DEBT HELD BY FAMILIES BY TYPE OF DEBT, 1998-2004

Percentage of families holding debt (1)	Home-secured	Other residential property	Install-ment loans	Credit card balances	Other lines of credit	Other	Any debt
1998	43.1%	5.1%	43.7%	44.1%	2.3%	8.8%	74.1%
2001	44.6	4.6	45.2	44.4	1.5	7.2	75.1
2004	47.9	4.0	46.0	46.2	1.6	7.6	76.4

By age of family head, 2004
Under 35 years old	37.7	2.1	59.4	47.5	2.2	6.2	79.8
35 to 44 years old	62.8	4.0	55.7	58.8	1.5	11.3	88.6
45 to 54 years old	64.6	6.3	50.2	54.0	2.9	9.4	88.4
55 to 64 years old	51.0	5.9	42.8	42.1	0.7	8.4	76.3
65 to 74 years old	32.1	3.2	27.5	31.9	0.4	4.0	58.8
75 years old and over	18.7	1.5	13.9	23.6	(2)	2.5	40.3

Percentiles of income, 2004 (3)
Less than 20	15.9	(2)	26.9	28.8	(2)	4.6	52.6
20 to 39.9	29.5	1.5	39.9	42.9	1.5	5.8	69.8
40 to 59.9	51.7	2.6	52.4	55.1	1.8	8.0	84.0
60 to 79.9	65.8	4.1	57.8	56.0	1.8	8.3	86.6
80 to 89.9	76.8	7.5	60.0	57.6	2.6	12.3	92.0
90 to 100	76.2	15.4	45.7	38.5	2.5	10.6	86.3
(1) Families include one-person units. (2) Ten or fewer observations. (3) Ranges listed below represent percentiles rather than income levels. A percentile is a statistical ranking point. The 50th percentile represents the midpoint of all values. For example, at the 50th percentile half of the families in the ranking fall above this income level and half fall below. Note: Latest data available. Based on surveys conducted every three years. Source: Survey of Consumer Finances, Board of Governors of the Federal Reserve System.

DEBT HELD BY FAMILIES BY TYPE OF DEBT AND LENDING INSTITUTION, 1998-2004

Type of debt	1998	2001	2004
Total	100.0%	100.0%	100.0%
Home-secured debt	71.4	75.2	75.2
Installment loans	13.1	12.3	11.0
Other residential property	7.5	6.2	8.5
Credit card balances	3.9	3.4	3.0
Other debt	3.7	2.3	1.6
Other lines of credit	0.3	0.5	0.7

Purpose of debt
Total	100.0%	100.0%	100.0%
Home purchase	67.9	70.9	70.2
Other residential property	7.8	6.5	9.5
Vehicles	7.6	7.8	6.7
Goods and services	6.3	5.8	6.0
Education	3.5	3.1	3.0
Investment, excluding real estate	3.3	2.8	2.2
Home improvement	2.1	2.0	1.9
Unclassifiable loans against pension accounts	(1)	(1)	(1)
Other	1.5	1.1	0.6

Type of lending institution
Total	100.0%	100.0%	100.0%
Mortgage or real estate lender	35.6	38.0	39.4
Commercial bank	32.8	34.1	35.1
Thrift institution (2)	9.7	6.1	7.3
Credit union	4.3	5.5	3.6
Finance or loan company	4.1	4.3	4.1
Credit and store cards	3.9	3.7	3.0
Brokerage	3.8	3.1	2.5
Individual lender	3.3	2.0	1.7
Other nonfinancial	1.3	1.4	2.0
Government	0.6	1.1	0.7
Pension account	0.4	0.3	0.3
Other loans	0.3	0.5	0.2
(1) Less than 0.05 percent. (2) Savings and loan association or savings bank. Note: Latest data available. Based on surveys conducted every three years. Source: Survey of Consumer Finances, Board of Governors of the Federal Reserve System.

CONSUMER CREDIT FINANCE RATES BY INSTITUTION AND TYPE OF LOAN, 1998-2007

	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007
Commercial banks
New automobiles (48 months)	8.73%	8.44%	9.34%	8.50%	7.62%	6.93%	6.60%	7.08%	7.72%	7.77%
Personal (24 months)	13.76	13.39	13.90	13.22	12.54	11.95	11.89	12.05	12.41	12.39
Credit card plans	15.71	15.21	15.78	14.87	13.40	12.30	12.72	12.51	13.21	13.38
Finance companies
New automobiles	6.30	6.66	6.61	5.65	4.29	3.81	4.92	6.02	4.99	4.87
Used automobiles	12.64	12.60	13.55	12.18	10.74	9.86	8.81	8.81	9.61	9.24
Source: Board of Governors of the Federal Reserve System.

HOUSEHOLD DEBT-SERVICE PAYMENTS AND FINANCIAL OBLIGATIONS AS A PERCENTAGE OF DISPOSABLE INCOME, 1980-2007 (1)

		Financial obligations ratio (2)
Year	Household debt service ratio (3)	Total	Renter	Homeowner
1980	10.58	15.37	23.62	13.33
1990	11.98	17.37	24.71	15.50
2000	12.89	18.25	30.52	15.78
2002	13.62	18.89	29.07	16.82
2003	13.55	18.58	26.77	16.92
2004	13.58	18.48	26.13	16.99
2005	14.11	19.06	26.03	17.70
2006	14.49	19.49	26.00	18.22
2007	14.32	19.35	26.14	18.02
(1) All values are for the fourth quarter. (2) The ratio of household debt payments described in footnote 3 plus the ratio of automobile lease payments, rental payments on tenant-occupied property, homeowners insurance and property taxes to disposable personal income. (3) The ratio of debt payments (estimated required payments on outstanding mortgage and consumer debt) to disposable personal income. Source: Board of Governors of the Federal Reserve System.

HOUSEHOLD DEBT AS A PERCENT OF DISPOSABLE INCOME, 1997-2006 (1)

(1) As measured by the household debt service ratio, an estimate of the ratio of debt payments to disposable personal income. Debt payments consist of the estimated required payments on outstanding mortgage and consumer debt. All values are for the fourth quarter for each year.

Source: Board of Governors of the Federal Reserve System.

CREDIT CARDS

Bank cards, credit cards issued by banks, are the most widely held type of credit card, with 95.4 percent of cardholders having such cards in 2004. Balances on bank cards accounted for 84.9 percent of outstanding credit card balances in 2004, up from 82.1 percent in 2001, according to the Federal Reserve's latest Consumer Finance Survey. Store cards were also popular, with 58.4 percent of cardholders having such cards in 2004.

The following chart is based on the Survey of Consumer Finances, undertaken every three years by the Federal Reserve. The 2007 survey is currently being conducted.

FAMILIES WITH CREDIT CARDS, 2001-2004

	2001 (1)	2004
All families
Percent of all families with credit cards	76.2%	74.9%
Percent of all families with credit card balance	44.4	46.2
Median amount of credit card balance ($000)	$2.0	$2.2
Families with credit card balance
By percentile of income
Less than 20 percent	30.3%	28.8%
20 to 39.9 percent	44.5	42.9
40 to 59.9 percent	52.8	55.1
60 to 79.9 percent	52.6	56.0
80 to 89.9 percent	50.3	57.6
90 to 100 percent	33.1	38.5
Median amount of credit card balance ($000)
By percentile of income
Less than 20 percent	$1.1	$1.0
20 to 39.9 percent	1.3	1.9
40 to 59.9 percent	2.1	2.2
60 to 79.9 percent	2.4	3.0
80 to 89.9 percent	4.0	2.7
90 to 100 percent	3.0	4.0
(1) All 2001 dollars adjusted to 2004 dollars. Note: Latest data available. Based on surveys conducted every three years. Source: Survey of Consumer Finances, Board of Governors of the Federal Reserve System.

GRADUATE STUDENT CREDIT CARD USAGE,
1998-2006

	1998	2000	2003	2006
Students with credit cards	95%	95%	96%	92%
Average number of credit cards	6.00	4.00	6.00	5.25
Average credit card debt	$4,925	$4,776	$7,831	$8,612
Source: Nellie Mae.

In 2004, 76 percent of undergraduates had credit cards; the average balance was $2,337 (latest available data).

DELINQUENCY RATES, RESIDENTIAL AND
CONSUMER CREDIT CARD LOANS, 1998-2007 (1)

	Residential (2)	Credit cards
1998	2.07%	4.70%
1999	1.97	4.50
2000	2.28	4.56
2001	2.23	4.69
2002	1.97	4.85
2003	1.78	4.43
2004	1.38	4.03
2005	1.63	3.53
2006	1.93	3.95
2007	3.00	4.59
(1) All figures are for the fourth quarter and are based on loans at commercial banks. Measured as a percentage of loans. (2) Residential real estate loans include loans secured by one- to four-family properties, including home equity lines of credit. Source: Board of Governors of the Federal Reserve System.

TOP TEN CREDIT CARD ISSUERS BY OUTSTANDINGS, 2005-2006 (1)

($ millions, end of year)

Rank	Company	2005	2006
1	Bank of America	$60,790.3	$170,736.6
2	JPMorgan Chase & Co.	138,900.0	146,100.0
3	Citigroup Inc.	113,700.0	111,600.0
4	Capital One Financial Corp.	49,463.5	53,623.7
5	Discover Financial Services Inc.	46,936.0	47,384.7
6	American Express	34,159.0	37,368.0
7	Washington Mutual Bank	19,973.0	23,501.0
8	Wells Fargo Bank	17,393.0	20,870.9
9	HSBC Credit Card Services	26,200.0	18,260.0
10	USAA Federal Savings Bank	8,877.5	8,877.5
(1) Based on responses to CID survey. Includes all credit card debt outstanding. Source: SourceMedia's Card Industry Directory.