As we reach into our wallets for a credit card this Christmas season, it may help to know that we are not alone. So many people are using so much plastic that the growth in consumer debt is the highest it has been in 30 years.
According to the Bulletin of the Federal Reserve System, consumer debt soared 24 percent between 1983 and 1984. At the end of 1984, total consumer debt (mostly credit cards and auto loans) was $452 billion, an average of $2,700 per household.
Each of us has very good reasons for contributing to the total consumer debt -- we needed whatever we bought with our line of credit. One factor that seems to be driving up the debt is that some of us need more things than others and those of us with the biggest needs are borrowing the most.
The Federal Reserve figures show that, as a percent of their total household income, baby-boom householders aged 25 to 34 use installment credit the most. Each of them owes an average of about $3,600, or 15 percent of their income.
We shouldn't be surprised that householders in their late 20s and early 30s have the most debt. That is the age when most people buy their first home and need to furnish it. Very few first-time home buyers have the ready cash to feather their nest.
But there is another reason. These are baby boomers who grew up with debt and use it freely. The only other time installment credit grew at a rate greater than 20 percent a year was during the 1950s when today's heavy debtors were born.