The recession of 2008 is apt to be remembered for a long time. The fact that Americans deeply loved credit at that time is seen in the number of credit cards they held that year. Credit came easy and Americans had grown accustomed to saying “charge it” wherever they went – whether they could pay for those items or not.
In 2008, it was not at all unusual for a household to have not just one, but several credit cards. According to a government census, there were 176 million people in America that had credit cards. At the same time, however, there were 1.49 billion credit cards in existence, which is just under 8.5 credit cards per cardholder.
At the same time, the amount of credit that was on those credit cards was also at an all-time high. In 2008, credit had hit $975 billion, and these heights have not been reached since – at least not yet.
After 2008, people began to pay off their debt and slowed down in obtaining new credit cards and new debt. Many people ran into all kinds of financial difficulties at that time, and large numbers of people lost jobs (unemployment soon hit 10.6 percent nationally, from a previous five percent before 2008) and many others even lost their homes. A large number of bankruptcies occurred everywhere in the next couple of years, and some are still occurring as a result. The good news is that the number of bankruptcies has dropped in 2011.
Americans began rethinking about credit and realized, perhaps for the first time in a long time that although credit can be good, staying in debt unnecessarily over the long term just does not make a lot of sense. As a result, many people cancelled their credit cards and worked on paying down the troublesome debt. This resulted, for the first time, in an overall decrease in the amount of credit card debt
After a while, people began to get back on their feet financially, and the economy picked up some. Soon, as might be expected, more people started to get new credit cards. Although the need for new credit cards has increased since its drop off after 2008 and 2009, it has not yet reached its previous peak levels. A definite upswing is on the way, however, and the numbers indicate that people once again feel a need to buy things on credit.
Credit cards are definitely coming back, but there is also an increase in the number of debit and prepaid cards being used. In 2011, the number of total credit cards is around 1.4 billion,[i] but the number of credit card owners has increased – 181 million people now have one or more cards.
Visa remains the most popular credit card, with 111 million cardholders. People that own this card have $388 billion in debt. MasterCard is next, with 98 million cardholders, and they have an overall debt of $284 million. The third card most popular card is American Express, and those cardholders owe $94 million. The total amount of credit card debt in the United States is now around $798.3 billion, with the average of 7.7 cards per household.