Knowing What You Owe: The Case of Credit Cards

New FRB NY report compares borrower and lender reports of consumer debt. It finds that we mostly know what we owe, with the exception of credit cards, where consumers report owing half as much as they do.

Do We Know What We Owe? A Comparison of Borrower- and Lender-Reported Consumer Debt

Household surveys are the source of some of the most widely studied data on consumer balance sheets, with the Survey of Consumer Finances (SCF) generally cited as the leading source of wealth data for the United States. At the same time, recent research questions survey respondents’ propensity and ability to report debt characteristics accurately. We compare household debt as reported by borrowers to the SCF with household debt as reported by lenders to Equifax using the new FRBNY Consumer Credit Panel (CCP). Moments of the borrower and lender debt distributions are compared by year, age of household head, household size, and region of the country, in total and across five standard debt categories. The debt reports are strikingly similar, with one noteworthy exception: the aggregate credit card debt implied by SCF borrowers’ reports is less than 50 percent of the aggregate credit card debt implied by CCP lenders’ reports. Adjustments for sample representativeness and for small business and convenience uses of credit cards raise SCF credit card debt to somewhere between 52 and 66 percent of the CCP figure. Despite the credit card debt mismatch, bankruptcy history is reported comparably in the borrower and lender sources, indicating that not all stigmatized consumer behaviors are underreported.

via Do We Know What We Owe? A Comparison of Borrower- and Lender-Reported Consumer Debt.

Credit debt


  1. John Riley says:

    What do they mean by "convenience use?" I build up a high balance every month, but pay it off every month. If someone asks me what I owe on my credit card, I'd say "zero" even though I know I actually have a $1000+ balance. Could that kind of use account for the variation?

    • Paul Kedrosky says:

      Good question. I think most people would respond with the actual current balance, would they not? It would certainly introduce some deep skews in the results were that not the case.

      • John Riley says:

        Leave it to us humans to screw up good data.

      • If I were responding to such a survey, I would report only my revolving balances. I don't consider charges within the grace period to be "debt" per se. Like John Riley, I am a "transactor" not a "revolver" – I build up large balances every month but then pay them in full. I think that this perspective probably accounts for a large portion of the statistical discrepancy.

  2. I would assume that is convenience use, but that was only 16%. I wonder if this is debt that has been written off by the debtor but not yet by the lender, but 1/3 seems high for that. Perhaps balance transfers in progress, modern kiting?

  3. The authors control for that possibility. Kevin Drum covers it….


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