Credit Card Debt: The Average American's Debt, Fraud, Credit Companies

How much credit card debt does the average American carry?

The average American holds about $8,000 in credit card debt. According to Experian, a credit reporting agency, the average balance on credit cards, auto loans, and other fixed payment debts totaled $16,600 in 2008. The numbers are up all across the board.

How many credit cards does the average person in the US hold?

This may come as a surprise to some, but according to the Fair Isaac Corporation, the average American has nine credit cards open. Bet you didn't even know there were that many slots in a wallet!

Specific Questions about Your Debt

Can one credit card company raise my interest rates because of something that happened with my other credit card?

Most credit card agreements state that the issuer can raise your rates for any reason they deem appropriate. So yes, if you have more than one credit card account, and you default on one, the other cards can become notified of this and in turn raise your rates or implement other penalties on your account, fearing that you will soon do the same thing to them. Your creditors regularly do inquiries to find out what is going on with your credit in order to reduce their risk.

Who really ends up screwed if someone steals my credit card and I report a fraud?

Many people falsely believe that when they report a credit card fraud the credit card company absorbs the cost. But in reality, the money is taken back from the retailers who accepted the fraudulent charges. Retailers end up losing the inventory that the thieves took from them. In the long term, credit card theft and fraud also hurts the credit card consumers because retailers end up raising their prices to compensate for their losses.

Debt Collection

At what times of day is it illegal for a debt collector to contact me?

In these difficult financial times, bill collector calls are rising and becoming more annoying. Just so you know, it is illegal for a bill collector to call you before 8AM or after 9PM of any day. They are not allowed to call you at any point in the day on Sunday either as long as you tell them that it is an inconvenient day for you. At least you can get one day of peace!

Is there such a thing as "debtors prison" ?

Debtors prison, a place for people who did not pay their debts, was real up until the mid 19^th century. It was huge in medieval times. Nowadays, people generally cannot be imprisoned for their unpaid debts, but in the US they can technically be jailed for not paying certain types of debts including child support and alimony. You can also go to jail for non-payment of other government obligations depending on the extent of the offense.

Sources:

"Merchant Credit Card Fraud" http://www.wiscocomputing.com/articles/ccfraud.htm

"FTC Staff Commentary on the Fair Debt Collection Practices Act" http://www.ftc.gov/os/statutes/fdcpa/commentary.htm

Chris Fichera "Credit card issuers have lots of reasons to raise your rates" http://blogs.consumerreports.org/money/2008/12/credit_rate_ris.html

MyFICO Credit Education http://www.myfico.com/CreditEducation/

http://en.wikipedia.org/wiki/Debtors%27_prison