Facts and Stats

Mortgage Lending Facts and Stats

• There were 3,157,806 foreclosure filings (default notices, auction sale notices and bank repossessions) in 2008, an 81% increase from 2007.  One in 54 homes received a foreclosure filing.
• One out of five subprime mortgages originated during 2005 and 2006 will end in foreclosure.  Altogether, over 8 million homes will be or have been lost.
• In mid 2008, analysts predicted that over 40 million homes not facing foreclosure would decline in value by an estimated $352 billion as subprime foreclosures lower the prices of surrounding homes.
• Subprime, high-interest and high-fee mortgage lending grew from 8% of total mortgage lending in 2003 to 28% in 2006.
• Of all subprime mortgages originated from 2004-2006, 90%  came with an exploding adjustable interest rate, 70% come with a pre-payment penalty, 75% included no escrow for taxes and insurance, and over 40% were approved without fully documented income.
• More than one half of all African American homebuyers and over 40% of Latino homebuyers received a subprime mortgage in 2006.  In comparison, about one fifth of white borrowers received a subprime loan that year.

Back to Top

Credit Card Debt:  Where does your state rank?

(February 18, 2010) What is the median amount of credit card debt per borrower in your state?  Find out below! 

This table shows the median amount of revolving debt per borrower in each state as of 2008.  Revolving debt is largely comprised of credit card debt (95%), and also includes private label cards and lines of credit.  Our Partner CFED acquired the data from TransUnion, a credit reporting agency, as part of their Assets and Opportunities Score Cards.

Back to Top

Credit Card Facts and Stats

• Americans owed over $850 billion in credit card debt at the end of 2009, down from $950 billion one year earlier.

• As of 2007, the average credit card debt per household was $7,430, and the average credit card debt for households who carry a balance was $17,103.

• Low- and middle-income households have an average of $8,650 in credit card debt.

• The total amount of credit made available by issuers in 2007 was about $5 trillion, or $43,007 per household.

The Credit Card Industry

• The industry is dominated by a few major players.  Just six companies - Bank of America, JPMorgan Chase, Citigroup, Capital One, Discover, and American Express - account for about 90% of all credit card debt.

• Credit card companies collected  $115 billion in revenue in 2006, about two-thirds from interest payments, one-fifth from fees paid by merchants who accept the cards, and about 15% from consumer fees.   Profits were $18 billion.

• Banks specializing in credit cards were for many years much more profitable than banks in general.  According to FDIC data for 2007, for example, the return on equity (a fancy name for profit rate) was 15.1% for credit card banks, compared to 8.2% for all banks.  In the current economic downturn, however, this is no longer true – the FDIC reports that credit card banks return on equity was negative 2.5% in the first three quarters of 2009, compared to positive 0.9% for all banks. 

College Students and Credit Cards

• In 2008, 84% of undergraduates had at least one credit card, up from 76% of undergraduates in 2004.  The average number of credit cards per student has grown to 4.6.

• In 2008, the average balance on undergraduate credit cards was $3,173, up from $2,169 in 2004.  The average senior graduated with $4,100 in debt.

• Nearly one-third (30%) of all students put tuition on their credit cards in 2008, up from 24% in 2004.  When asked why they were charging tuition to their credit cards, 31% of students surveyed said they did so because they didn't have enough savings or financial aid to pay for their educational expenses.

• Only 17% of undergraduate students in 2008 paid off all credit card balances each month.  Seven percent (7%) admitted to paying less than the minimum each month.  More than three-quarters of all undergraduates make the minimum required payments while incurring penalty charges and rate increases, making it much harder for them to get out of debt.

• Eighty-four percent of undergrauates in 2008 indicated that they needed more education in financial management.  Sixty-four percent (64%) would have liked to receive financial education in High School, and 40% would have liked to receive financial education during their freshman year of college.

People of Color

• Eighty-four percent of African American credit cardholders carry a credit card balance, compared to 75% of Hispanics and 51% of whites.  This makes people of color more vulnerable to arbitrary interest rate increases and other industry profit-boosting tactics.

Back to Top

Payday Loan Facts and Stats

• Payday loans cost consumers over $4.2 billion in predatory fees each year.

• The typical payday borrower pays back $793 for a $325 loan.

• Ninety percent of the payday industry’s revenues come from consumers who get five or more loans in a year.

• For two-week payday loans, finance charges result in interest rates from 390% to 780% APR.  The first APR is for a fee of $15 per $100 borrowed, the second APR results from a fee of $30 per $100 borrowed.

• The fifteen states (and DC) which have banned payday lending, are saving their residents a total of $1.8  billion per year in predatory payday loan fees.

• There are more payday stores in the United States than McDonalds restaurants.  At the start of start of 2008, industry analysts claimed that about 23,600 payday storefronts in operation.

Back to Top

Student Loan Facts and Stats

• Undergraduate students who graduate with loans have an average of $22,700 in debt.

• Nearly two-thirds of students at four-year colleges and universities graduate with student loan debt.  By comparison, in 1993 less than one-half of four-year graduates had student loans.

• Private loans, which are more expensive and riskier than federal loans, now comprise about 24% of the nation’s total education loan volume.

• In the 2007-08 school year, 14% of all undergraduates had private student loans.  The percentage was much higher at for-profit colleges, where 42% of all students had private loans.

• Almost two thirds (64%) of private loan borrowers in 2007-08 borrowed less than they could have in federal student loans, and over one quarter (26%) took out no federal loans at all.

Back to Top

Overdraft Loan Facts and Stats

• An overdraft fee of $34 for a $3.40 cup of coffee translates into a 1,000% annual percentage rate (APR) if you repay the loan in one year.  If you repay the loan in one week, the APR is a staggering 52,143%!

• Overdraft loans cost consumers $17.5 billion per year, more than the $15.8 billion extended in funds to cover the overdrafts.

• A small group of consumers is paying the majority of fees.  Sixteen percent of overdraft loan users account for 71% of overdraft loan fees.

• Americans who depend heavily on Social Security income pay nearly $1 billion per year in fees for unauthorized overdrafts.

• Some banks advertise overdraft loans as a way to make it until the next payday. 

Back to Top

Refund Anticipation Loan Facts and Stats

• In 2007, Americans paid $900 million to get their own tax refunds about ten days early.

• About 8.7 million RALs were made in 2007 (almost1 in 15 taxpayers received one).

• RALs are targeted at low-income consumers, particularly those eligible for the Earned Income Tax Credit (EITC).  In 2006 RALs siphoned money from 5.7 million EITC-eligible families, draining them of a total of $627 million.  (Read this PDF by the Annie E. Casey Foundation to find out more about the EITC.)

• Sixty-three percent of RAL consumers were EITC recipients in 2006, although EITC recipients make up only 17% of taxpayers.

• The three largest RAL providers are H&R Block (which arranged 4 million RALs in 2006), Jackson Hewitt (1.3 million), and Liberty Tax Service (about 260,000).

Back to Top

Car Title Loan Facts and Stats

• The typical car title loan has an annual interest rate of 300% or more.

• In Oregon, 19% of title loans that were paid off in May 2002 had been renewed six times prior to payoff.

• The Missouri Auditor found that, on average, car title lenders make 3.5 times more renewal loans than new loans each month.

• Over half of the states ban high-priced car title lending, but in states where it is legal the industry is growing at an alarming rate.

Back to Top

Debt Collection Facts and Stats

• The Federal Trade Commission (FTC) received 70,951 complaints about debt collection in 2007, although this likely represents only a tiny fraction of the people who were actually harassed by collectors that year.

• The FTC receives more complaints about debt collection than any other specific industry.

• Over $110 billion in face value of debt was purchased in the United States in 2005.

Back to Top

Credit Reporting and Scoring Facts and Stats

• A US PIRG report found that 25% of credit reports contain serious errors that could result in the denial of credit, and 79% contain mistakes of some kind.

• An NCLC report (PDF) found that credit reporting agencies have minimized the resources devoted to handling error investigations to the point that one agency pays its dispute-handling vendor in the Philippines a mere $0.57 per dispute letter.

• According to a recent survey (PDF), less than one third of Americans know that 700 is the lowest score that would qualify a consumer for a prime-rate mortgage.

• Everyone is entitled to a free copy of their report from each of the Big Three agencies once every twelve months.  The official site which provides these reports is www.annualcreditreport.com.

• Consumers often fall for ads for other sources of "free" credit reports.  These are often scams that lead consumers to sign up for costly and ineffective credit monitoring services.  The New York Times reported on one of the most popular scams in "The High Cost of a 'Free Credit Report.'"

• An analysis by Consumers Union shows that credit monitoring services are often “overrated, oversold, and overpriced.”  About 24 million customers have signed up for such services which purport to protect against identity theft.

Back to Top

Debit Card Facts and Stats

• Debit cards are becoming the dominant form of payment for consumers, according to a 2006 Federal Reserve Board research report.

• Spending on debit cards topped $1 trillion for the first time in 2006.

• In 2006, the number of debit transactions outnumbered those on credit cards by more than 2 billion.

• Debit cards are especially popular among women and people between the ages of 18 and 25.

• Customers who used debit cards more than 20 times a year paid an average of $223 in overdraft fees annually, compared with $40 for those who didn't use debit cards at all.

Back to Top

The Impact Of Subprime And Predatory Lending On People of Color:  Twelve Facts

1. African-Americans and Latinos are at greater risk of receiving high-rate mortgage loans than white borrowers, even after controlling for legitimate risk factors.

2. Racial differences in mortgage lending increase as income increases.  Middle- and upper-income blacks are at least twice as likely as similar whites to receive high-cost loans in most metropolitan areas.

3. Over 70% of high-income African American borrowers in Boston received a high-cost mortgage loan in 2005.  High-income African Americans were therefore seven times as likely to receive a high-cost loan as high-income whites.

4. In 2006, 18.8% of loans made in predominantly minority neighborhoods were originated by high-risk lenders.  Only 5.3% of loans made in predominantly white neighborhoods were made by these lenders.

5. In Los Angeles in 2006, subprime lending was 9.5 times more common in minority neighborhoods than white neighborhoods.

6. Unregulated “yield spread premiums” create a financial incentive for mortgage brokers to steer minority borrowers into loans with higher interest rates than their credit record warrants.

7. Fewer than half (48.4%) of African-American households owned their own homes in 2003, compared with three-quarters (75.1%) of whites who owned.

8. Eighty-four percent of African American and 75% of Hispanics credit cardholders carry a credit card balance, compared to and 51% of whites.  This makes people of color more vulnerable to arbitrary interest rate increases and other industry profit-boosting tactics.

9. Studies consistently show that payday lending stores are concentrated in predominantly low-income neighborhoods with high populations of African-Americans and Hispanics.

10. In North Carolina, African-American neighborhoods have three times as many payday lending stores per capita as white neighborhoods.  This ratio holds when data are controlled for other factors, such as income and education.

11. African Americans pay higher rates for both new and used car loans.  A 2004 study showed that African-Americans paid a median interest rate of 7% for a new car, compared with 5% for white borrowers and 5.5% for Hispanic borrowers.

12. For used car loans, African-Americans paid a median interest rate of 9.5% and Latinos paid a median rate of 9%.  For whites, the median is 7.5%.

Back to Top