Fed Releases Latest Survey of Consumer Finances

Glenbrook's Bryan Derman adds his commentary on the updated survey findings:

If you've never had the opportunity to dive into the Fed's Survey of Consumer Finances (SCF), you're missing a real page-turner. It's a pretty definitive source on the usage and ownership of various financial products and since they only do the study every three years, the release of the "new" 2004 survey is a meaningful event.

This survey is sometimes criticized for underestimating the unbanked population, and they do peg it at around 10% of US households, which is surely the low end of the range. That may be partly explained by the fact that they intentionally oversample high income households in order to get meaningful estimates of the ownership of certain investment instruments.

Here's some commentary from the survey about credit card debt:

As with installment borrowing, the carrying of credit card balances is widespread but notably lower among the highest and lowest income groups, the highest wealth group, and families headed by persons who are aged 65 or older or are retired.40 From 2001 to 2004, the proportion of families carrying a balance rose 1.8 percentage points, to 46.2 percent. The preceding three years had seen a much smaller increase in use. The recent increase was shared by most demographic groups; the proportion carrying a balance declined for the lowest two income groups, the lowest wealth group, the youngest age group, nonwhite or Hispanic families, and renters.

Overall, the median balance for those carrying a balance rose 10.0 percent, to $2,200; the mean rose 15.9 percent, to $5,100. Over the preceding three years, the median had been little changed, but the mean had fallen 8.3 percent. In the recent period, the median balance rose strongly for most demographic groups; but borrowing declined notably for the lowest and next-to-highest income groups and for the youngest age group.

Many families with credit cards do not carry balances. Of the 74.9 percent of families with credit cards in 2004, only 58.0 percent had a balance at the time of the interview; in 2001, 76.2 percent had cards, and 55.4 percent of these families had an outstanding balance on them (data not shown in the tables). The proportion of cardholders who had a bank-type card was unchanged over this three-year period, whereas the proportion of cardholders having most other card types declined.