A recent analysis indicates that American consumers may be under-reporting their credit card debt levels in surveys.
The analysis was done by the Federal Reserve Bank of New York. In the analysis, the reserve bank compared the results of a Federal Reserve survey to Equifax-compiled bank data to see how accurate the survey responses were when it came to different types of debt.
The analysis found there to be a big gap between the survey results and the bank data when it came to credit card debt. The bank data indicates that, in 2010, the median credit card debt for households in the U.S. was around $3,500. However, in the Federal Reserve survey, the median credit card debt reported by households for that year was only $2,000. The results of this analysis raise the possibility that many families significantly under-report the amount of credit card debt they have in Federal Reserve surveys.
There are many things that could potentially cause such an under-reporting. One is households intentionally under-reporting because they are embarrassed about how much credit card debt they have. Another is households accidentally under-reporting because they didn’t have accurate knowledge of how much credit card debt they actually had. The list of possibilities goes on.
What do you think is causing the apparent under-reporting of credit card debt indicated by the analysis? Do you think Americans generally have a fair amount of embarrassment about their credit card debt levels? How knowledgeable do you think the typical American consumer is about their credit card debt level? Do you think being dishonest with oneself or others about credit card debt level and failure to have an accurate awareness of one’s credit card debt level are common problems here in the U.S.?
Both extreme embarrassment about credit card debt and lack of knowledge about such debt can be barriers to individuals with high credit card debt getting the help they need. Those who are very embarrassed about their credit card debt may have a great reluctance to talk about their debt with anyone, including professionals who could help them understand their options. Lack of knowledge of one’s credit card debt levels, meanwhile, could cause a person to not know they need to seek out help or get in the way of them understanding what type of debt relief solution could be best for them. These things could be quite harmful to consumers.