Paying With Plastic: Credit Cards in America |

The average American household has $16,007 in credit card debt, spread over 3.5 credit cards. The approximate number of cardholders in the United States is 164 million, or 54 million households, with a total of 576 million cards in circulation. The total consumer debt in the United States is $2.46 trillion. With these sobering statistics, it’s easy to tell that credit cards are big business in America.

The credit card industry is booming, and the following credit card issuers are the top 10 in America as of 2010:

  • Chase, with $165 billion in credit cards in America;
  • Bank of America with $150 billion in credit cards in America;
  • Citi with $102 billion in credit cards in America;
  • American Express with $78 billion in credit cards in America;
  • Capital One with $55 billion in credit cards in America;
  • Discover with $48 billion in credit cards in America;
  • Wells Fargo with $30 billion in credit cards in America;
  • HSBC with $26 billion in credit cards in America;
  • US Bank with $20 billion in credit cards in America; and
  • USAA Savings with $12 billion in credit cards in America.

Most of these issuers reported profits for 2008, with Citi being the notable exception, with a loss of $530 million. Capital One and US Bank reported the largest profits in 2008, at $1000 and $1070 million, respectively.

Despite the boom in credit card business, the number of credit card transactions in 2009 declined across the board: Discover reported a 0.3% decline; MasterCard transactions declined by 6%; Visa transactions declined by 2%; and American Express transactions declined most steeply at 7.4%.

Given the popularity of credit cards with most Americans, it’s safe to assume most Americans carry a sizable consumer debt. It’s helpful, then to have a credit card glossary of terms to know when you are in debt, which follows below.­

Collection–in the credit world, collection is an effort by a collections department or agency to get a past-due debt repaid.

Default–to default is to fail to make a payment on a debt by the due date.

Default APR–if you are late in making payments, your standard APR may increase to a default APR. Also called a penalty rate. The average APR for credit cards is 14.5%.

Finance charge–a finance charge is the total cost of borrowing, including interest and fees, expressed in a dollar amount.

Nondischargeable debt–a nondischargeable debt is a debt that cannot be cleared away–in legal terms, “discharged”–after filing for bankruptcy.

Time-barred debt–time-barred debt is a particular type of old, unpaid debt. Every state has a statute of limitations that limits how long a creditor can get a court judgment forcing payment.

Universal default–universal default is a common practice among credit card issuers that allows them to increase cardholders’ interest rates for any change in risk profile with any lender.

Wage garnishment–wage garnishment is a court-ordered technique of debt collection in which a debtor’s paycheck is deducted a set amount which is paid to a creditor or court until the debt is paid in full.

Zombie debt–Zombie debt is old credit card and other debts that are beyond the statute of limitations, so a debt collector cannot successfully use the courts to collect them.

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