Sep 24 2008

Consumer Debt Stress and Credit Cards


In its ongoing efforts to analyze issues affecting the future of consumer finance, we have released the second in a series of Consumer Finance Research Briefs, based on information derived from Ohio State University’s Consumer Finance Monthly (CFM) survey. Consumer Debt Stress and Credit Cards, by Filene Executive Director and CEO Mark Meyer, explores debt- related stress with a focus on credit card debt.

The analysis seeks to address the following research questions:

  • Did levels of consumer debt stress increase in 2007 from 2006 as the sub-prime mortgage crisis publicly unfolded? The CFM shows that consumers in top stress categories who worry about overall debt rose from 14.7 in 2006 to 16.2 in 2007.
  • How do levels of consumer debt stress vary by credit card debt indicators such as total credit card debts, missed payments, accounts sent to collections, and previous bankruptcies? A prior bankruptcy filing, for example, increases the likelihood that a survey respondent will report high levels of debt- related stress. This suggests that bankruptcy is merely a temporary solution to an ongoing problem.
  • How do levels of consumer debt stress vary by demographic variables such as age, annual household income, gender, race/ ethnicity, and marital status? CFM data indicate that individuals with higher overall debt stress levels have lower household incomes than do those with lower debt stress levels. Those with the lowest household incomes are likely to endure the highest levels of debt- related stress.

Read the first Consumer Finance Monthly Brief

Mark Meyer
Mark Meyer
President + CEO
Filene Research Institute
Report Number 170