Consumer Debt

January 25, 1980

Report Outline
Strains on Consumer Credit
Changing Views on Borrowing
Future Credit Trends in U.S.
Special Focus

Strains on Consumer Credit

Concern Over Mounting Consumer Debt

Neither a borrower nor a lender be,” Shakespeare advised. But many consumers seem to be ignoring the first part of that admonition in their rush to keep up with — and stay ahead of — inflation. At the close of the 1970s, Americans were borrowing more and saving less than they had in years. Consumer credit, which includes installment and non-installment debt but not mortgage obligations, amounted to $370 billion in September 1979, up from $185 billion in February 1975. In the past decade total personal debt, including mortgages, has more than doubled, rising from $430 billion in 1970 to $1.2 trillion in the third quarter of 1979. The average family now spends approximately 23 percent of its disposable income to pay off its mortgage and other debts.

In their struggle to maintain their standard of living in the face of double-digit inflation, many Americans are drawing on their savings. The Commerce Department reported Jan. 17 that in 1979 the savings rate fell to a 30-year low of 4.5 percent of disposable income. That was down from 4.9 percent in 1978 and was the lowest yearly level since 1949, when it was 3.6 percent. The savings rate in November was 3.3 percent, the lowest since the department began keeping monthly figures in 1956.

The drop in savings coupled with the rise in personal debt worries many economic analysts. They are particularly concerned about the ready availability of credit, notably credit cards and revolving bank accounts which make it possible for customers to write checks for more money than they have. There are nearly 600 million credit cards in use in the United States today — an average of seven cards for each of the 82 million adults who use them.

ISSUE TRACKER for Related Reports
Credit and Consumer Debt
Jul. 20, 2012  Debt Collectors
May 17, 2011  Future of the Euro
Oct. 10, 2008  Regulating Credit Cards
May 09, 2008  Financial Crisis
Mar. 02, 2007  Consumer Debt
May 26, 2006  Teen Spending
Nov. 19, 1999  The Consumer Culture
Nov. 15, 1996  Consumer Debt
Sep. 13, 1985  America in Debt
Jan. 25, 1980  Consumer Debt
Apr. 11, 1975  Consumer Credit Economy
Jan. 12, 1972  Directions of the Consumer Movement
Nov. 10, 1965  Personal Debt in a Consumer Economy
Jan. 02, 1957  Tight Credit
Feb. 10, 1956  Consumer Credit
Mar. 30, 1949  Installment Credit
Aug. 09, 1941  Restriction of Consumer Credit
Jan. 28, 1941  The Big Business of Making Small Loans
Jan. 17, 1934  Federal Credit Aid for Consumers
Jan. 01, 1930  Installment Buying, 1920–1930
Consumer Behavior
Consumer Credit and Debt