Maybe you kid yourself about the amount of credit card debt you have, maybe not.

But a working paper by Joanna Stavins, a senior economist and policy advisor at the Boston Fed, indicates that, at the very least, people aren’t entirely truthful with researchers about it, whether that’s intentional or not. 

For a decade, the Federal Reserve Bank of Boston has been surveying U.S. consumers about their credit card behavior and preferences, and over the past few years it added a new wrinkle by merging – with their permission – an individual’s survey results with their financial data from the Equifax credit bureau.

Overall, respondents undershot their credit card debt by about 20 percent when responding online to researchers for the Federal Reserve Bank of Boston’s Survey of Consumer Payment Choice and by about 15 percent when talking to Survey of Consumer Finance researchers. The tendency to underestimate debt was true for both men and women and across all age groups. Stavins said it’s not surprising: “It’s stigmatizing to admit debt to yourself, never mind to someone else.” 

She added it’s ultimately inconsequential, provided people aren’t fooling themselves about their debt.

“As long as they’re honest with themselves, that’s much more important,” she said.

Stavins’ paper also offered a variety of insights into how people are using credit cards by age, race, income and gender. Here are some other highlights:

Nuts and bolts

The paper merged data sets from SCPC, the SCF, and the Equifax credit bureau from 2014-2016. 

Some interesting numbers:  

• Average credit limit: $25,720 (Equifax)
• Average balance for “revolvers” (users who carry a balance): $6,597 (Equifax)
• Percentage of credit card user who are revolvers: 44 percent (SCPC)
• Cards per user: 2.26 (Equifax)
• Average annual interest rate: 13.56 percent (Federal Reserve Economic Data for 2016)
• Average annual interest cost for a revolver: $713.55 (Calculated using data from the 2016 SCPC)

The "revolver” in the mirror

The practice of carrying credit card balances month to month, known as revolving, does not correlate perfectly with education or income levels. For instance, SCPC numbers indicate that people whose education ended with a high school diploma revolve at roughly the same percentage as those with graduate degrees (42 percent to 43 percent). The same goes for those making $25,000-$49,000 annually and those making more than $100,000 annually (both at 43 percent). 

The numbers speak to the broad lure of the credit card. Stavins recalled that one of her friends put her credit cards in the freezer so she could only use them after a waiting period. “It’s tempting no matter who you are,” she said.

Love, American style

Sure, credit cards can be dangerous, but Americans love them anyway.

Nearly three-quarters of adults in the U.S. (73.9 percent) have a credit card, according to Equifax, and the only age group with an adoption rate less than 69 percent is people under 25 (theirs is 48.4 percent). Another recent study, which was not part of Stavins’ paper, indicates that Americans also continue to be far more enamored with credit cards than Europeans. U.S. consumers use credit on 40 percent of in-person purchases, far outpacing usage in countries such as Spain (20 percent), France (7 percent) and Germany (1 percent), according to Worldpay’s 2018 Global Payments Report. (The report says debit cards are the next-most-frequent U.S. in-person payment method, at 35 percent.)

Same cards, different reasons

Those who pay their credit card balances off every month – called convenience users – actually use their cards with a much higher frequency than revolvers, according to Stavins’ paper. There are several possible reasons for that, including the fact that revolvers may be constrained by lower credit limits than those who always have a zero monthly balance. Stavins added that some convenience users like to take advantage of “float,” the short term loan of sorts they get by using cards without having to pay until the monthly balance comes due. They can also accumulate highly promoted rewards, such as airline miles or cash back.

“Reasons why different income levels use credit cards could be quite different,” she said.   

For more stats and information, check out Stavins’ paper, "Credit Card Debt and Consumer Payment Choice: What Can We Learn from Credit Bureau Data?"