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Article: Credit Card Borrowing, Delinquency, and Personal Bankruptcy.(Statistical Data Included)
- Article from:
- New England Economic Review
- Article date:
- July 1, 2000
- Author:
CopyrightCOPYRIGHT 2000 Federal Reserve Bank of Boston. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Credit card delinquencies and personal bankruptcy rates increased during the mid 1990s, despite the strength of the U.S. economy. Even though per capita income rose during that period, household borrowing grew at an even faster pace. The ratio of consumer debt (excluding real estate) to disposable income increased, and it has remained above 20 percent, despite rising incomes. The rise in revolving debt--mainly credit card loans (1) -- was especially noticeable, resulting in an increase in the share of revolving debt in total consumer debt (Figure 1).
The increase in personal bankruptcy rates was also substantial. From 1994 to 1998, the number ...