Article Abstract:
Evidence from the Federal Reserve Board's 1983 and 1986 surveys of consumer finances show an increase in consumer debt and some trends relating to income, automobile purchases, and credit card use. Demographic changes between 1983 and 1986 may have contributed to a reduction in consumer debt because the increase in high-debt families headed by someone between 25 and 45 years old, was counteracted by a greater increase in low-debt households headed by older unmarried people. The number of families with both credit card debt and closed-end debt, such as automobile loans, increased 5.7% between 1983 and 1986. The results also indicate that relatively wealthy people were more likely than others to have both credit card and closed-end debt. The data also suggests that consumers may be replacing some of their traditional dependence on taxable consumer credit with tax deductible home mortgage loans.
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Article Abstract:
The Survey of Consumer Finances, 1983 sponsored by five government agencies, including the Department of Health and Human Services and the Board of Governors of the Federal Reserve System, provides comprehensive data relating to the assets and liabilities of the 3,824 American households surveyed, information regarding use of financial services, pensions, and attitudes toward consumer credit regulations. Survey results indicate that the largest financial obligation of American families is mortgage debt, with the mean mortgage valued at $27,147. Families having a net worth in excess of $25,000 increased to 50 percent in 1983 from 22 percent in 1970 and 38 percent in 1977. Unmarried persons have the smallest net worth, while figures indicate that net worth increases with age, income, and education (except for the oldest age group).
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Article Abstract:
An overview of surveys published in the Federal Reserve Board's Bulletin showed several trends in consumer instalment debt. In 1986, consumer instalment debt reached its highest level compared to disposable income. The stock of debt has risen faster than debt service payments. Consumers have changed their preference in credit vehicles. Consumer credit is being replaced by mortgage credit because of tax changes and promotion of home equity credit. The ratio of income to payments shows that families' debt burdens vary considerably over time. Of the families with consumer instalment debt, 80% have sufficient assets to liquidate their debts in emergencies.
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