How much consumer debt is too much?
Today’s infographic uses extensive data from Equifax to try and answer this question.
We put consumer debt in a historical context, while providing an in-depth look at the latest numbers on different categories of debt such as student loans, credit cards, and mortgages to see how they compare.
In the United States, there are three broad types of debt in the spectrum: government, corporate, and consumer debt.
Government debt consists of federal, state, and municipal debt, and adds to a total of 136% of GDP. Meanwhile, corporate and consumer debt, which together constitute private debt, amount to 197% of GDP.
The History of Consumer Debt
Before diving into the numbers, there are two historical developments worth mentioning that have greatly influenced consumer debt.
The first is the rise of consumer credit through the 20th century.
If you go back to the 1800s, it was a different place:
- Information moved as fast as a boat.
- 90% of Americans lived in rural areas.
- 75% of Americans were involved with agricultural production.
- There was a stigma around borrowing to buy luxury items, and some saw it as immoral.
- Credit was only used in essential cases, such as borrowing money to buy seeds for farming.
- Credit history was oral and based on personal reputation.
Today is vastly different. Information travels instantaneously, the economy is diversified, computers are everywhere, and factories pump out cheap goods that people want to buy. Credit history is universal, and 72% of Americans have at least one credit card.
For more information about the development of credit in the 20th century, check out this motion graphic video on the history of credit cards.
The second factor that greatly influenced today’s consumer debt situation was government intervention in the mortgage markets between 1949 and 2000.
Agencies such as the Federal Housing Administration (FHA), Ginnie Mae, Fannie Mae, and Freddie Mac were active with the following objectives:
- Insuring mortgages
- Providing liquidity to the mortgage finance system
- Stabilizing the mortgage market
- Expanding the secondary market for mortgages
Between 1949 and 2000, home ownership increased from 54% to 64.7%.
However, that coincided with increases in debt-to-income ratios (20% to 73%) and mortgage debt to household assets (15% to 41%).
The Composition of Consumer Debt
According to Equifax, U.S. consumer debt is at $12.44 trillion. Here’s how it breaks down:
|Student Loans||$1.27 trillion||10.2%|
|Auto Loans||$1.14 trillion||9.2%|
|Credit Card||$0.74 trillion||6.0%|
|Total Consumer Debt||$12.44 trillion||100.0%|
Consumer Debt Trends
1. Mortgage Debt
Mortgage debt, by far the largest category of consumer debt, peaked during the 2008 Financial Crisis at close to $10 trillion. Today, however, it makes up 72% of total consumer debt at $8.96 trillion.
This debt has been partially fueled by the lowest interest rates in history, which have put mortgage rates at all-time lows.
Since 2010, mortgage defaults and delinquencies have both trended down back towards normal levels.
2. Student Loans
For the first time in history, consumers are more in debt to student loans than any other type of non-mortgage debt.
The amount of student debt per person has steadily increased each year – especially for young people. For 18-25 year olds, student loan debt per person has increased from $4,637 in 2005 to $10,552 in 2015. The average young millennial now owes over 60% of of their non-mortgage debt to student loans.
In total, Americans now have $1.3 trillion in student debt, spread between 44 million people.
3. Credit Cards and Private Label Cards
Credit card spending has been steadily increasing since the Financial Crisis, but it has not yet hit pre-crisis levels yet. As it stands, Americans have $665.8 billion in credit card debt spread between 391.9 million cards.
Debt from private label cards, on the other hand, has surpassed pre-crisis levels. Private label cards are typically used to provide credit at department stores, furniture stores, and other retail locations. It is now at $77.4 billion, though this is relatively small compared to other credit card debt that exists.
4. Auto Loans
Total outstanding balances on auto loans and leases have increased 9.3% year-over-year to $1.14 trillion – putting it at all-time highs and making it the third largest consumer debt market overall.
However, auto loan delinquencies have been generally trending down over recent years.
Putting it All Together
As far as non-mortgage debt goes, consumers have never been more indebted.
However, mortgage debt is what really moves the needle for total debt numbers – and that is still not near levels seen during the Financial Crisis.
|Student Loans||$1.27 trillion||Yes|
|Auto Loans||$1.14 trillion||Yes|
|Credit Card||$0.67 trillion||No|
|Private Label Cards||$0.08 trillion||Yes|
Mapped: Corruption in Countries Around the World
Which countries are the most (and least) corrupt? This map shows corruption around the world, and the movers and shakers over the last decade.
Mapped: Corruption in Countries Around the World
How bad is public sector corruption around the world, and how do different countries compare?
No matter your system of government, the public sector plays a vital role in establishing your economic mobility and political freedoms. Measuring corruption—the abuse of power for private gain—reveals how equal a system truly is.
For more than a decade, the Corruption Perceptions Index (CPI) by Transparency International has been the world’s most widely-used metric for scoring corruption. This infographic uses the 2021 CPI to visualize corruption in countries around the world, and the biggest 10-year changes.
Which Countries are Most (and Least) Corrupt?
How do you measure corruption, which includes behind-the-scenes deals, nepotism, corrupt prosecution, and bribery?
Over the last few decades, the CPI has found success doing so indirectly through perceptions.
By aggregating multiple analyses from country and business experts, the index assigns each country a score on a scale of 0 to 100, where 0 is highly corrupt and 100 is very clean.
Here are the results of the 2021 CPI, with the least corrupt countries at the top:
|Corruption Perception by Country||Score (2021)|
|Saint Vincent and the Grenadines||59|
|Sao Tome and Principe||45|
|Trinidad and Tobago||41|
|Bosnia and Herzegovina||35|
|Papua New Guinea||31|
|Central African Republic||24|
|Democratic Republic of the Congo||19|
Ranking at the top of the index with scores of 88 are Nordic countries Denmark and Finland, as well as New Zealand.
They’ve consistently topped the CPI over the last decade, and Europe in general had 14 of the top 20 least corrupt countries. Asia also had many notable entrants, including Singapore (tied for #4), Hong Kong (#12), and Japan (tied for #18).
Comparatively, the Americas only had two countries score in the top 20 least corrupt: Canada (tied for #13) and Uruguay (tied for #18). With a score of 67, the U.S. scored at #28 just behind Bhutan, the UAE, and France.
Scoring towards the bottom of the index were many countries currently and historically going through conflict, primarily located in the Middle East and Africa. They include Afghanistan, Venezuela, Somalia, and South Sudan. The latter country finishes at the very bottom of the list, with a score of just 11.
How Corruption in Countries Has Changed (2012–2021)
Corruption is a constant and moving global problem, so it’s also important to measure which countries have had their images improved (or worsened).
By using CPI scores dating back to 2012, we can examine how country scores have changed over the last decade:
|Change in Corruption by Country||10-Year Trend (2012-2021)|
|Papua New Guinea||+6|
|Sao Tome and Principe||+3|
|Trinidad and Tobago||+2|
|United Arab Emirates||+1|
|Central African Republic||-2|
|Democratic Republic of the Congo||-2|
|Saint Vincent and the Grenadines||-3|
|United States of America||-6|
|Bosnia and Herzegovina||-7|
The biggest climber with +18 was Seychelles, Africa’s smallest country and also its least corrupt with a score of 70. Other notable improvements include neighboring countries Estonia, Latvia, and Belarus, with Estonia rising into the top 15 least corrupt countries.
On the opposite side, both Australia (-12) and Canada (-10) have actually fallen out of the top 10 least corrupt countries over the last decade. They’re joined by decreases in Hungary (-12) and Syria (-13), which is now ranked as the world’s second-most corrupt country.
Which countries will rise and fall in corruption perceptions over the next 10 years, and how do your perceptions compare with this list?
How the Top Cryptocurrencies Performed in 2021
Cryptocurrencies had a breakout year in 2021, providing plenty of volatility and strong returns across crypto’s various sectors.
The Returns of Top Cryptocurrencies in 2021
2021 saw the crypto markets boom and mature, with different sectors flourishing and largely outperforming the market leader, bitcoin.
While bitcoin only managed to return 59.8% last year, the crypto sector’s total market cap grew by 187.5%, with many of the top coins offering four and even five-digit percentage returns.
2021 Crypto Market Roundup
Last year wasn’t just a breakout year for crypto in terms of returns, but also the growing infrastructure’s maturity and resulting decorrelation of individual crypto industries and coins.
Crypto’s infrastructure has developed significantly, and there are now many more onramps for people to buy altcoins that don’t require purchasing and using bitcoin in the process. As a result, many cryptocurrency prices were more dictated by the value and functionality of their protocol and applications rather than their correlation to bitcoin.
|Ethereum||Smart Contract Platform||399.2%|
|Binance Coin||Exchange Token||1,268.9%|
|Solana||Smart Contract Platform||11,177.8%|
|Cardano||Smart Contract Platform||621.3%|
|Terra||Smart Contract Platform||12,967.3%|
|Avalanche||Smart Contract Platform||3,334.8%|
|Polkadot||Smart Contract Platform||187.9%|
Sources: TradingView, Binance, Uniswap, FTX, Bittrex
Bitcoin wasn’t the only cryptocurrency that didn’t manage to reach triple-digit returns in 2021. Litecoin and Bitcoin Cash also provided meagre double-digit percentage returns, as payment-focused cryptocurrencies were largely ignored for projects with smart contract capabilities.
Other older projects like Stellar Lumens (109%) and XRP (278%) provided triple-digit returns, with Cardano (621%) being the best performer of the old guard despite not managing to ship its smart contract functionality last year.
The Rise of the Ethereum Competitors
Ethereum greatly outpaced bitcoin in 2021, returning 399.2% as the popularity boom of NFTs and creation of DeFi 2.0 protocols like Olympus (OHM) expanded possible use-cases.
But with the rise of network activity, a 50% increase in transfers in 2021, Ethereum gas fees surged. From minimums of $20 for a single transaction, to NFT mint prices starting around $40 and going into the hundreds on congested network days, crypto’s retail crowd migrated to other smart contract platforms with lower fees.
Alternative budding smart contract platforms like Solana (11,178%), Avalanche (3,335%), and Fantom (13,207%) all had 4-5 digit percentage returns, as these protocols built out their own decentralized finance ecosystems and NFT markets.
With Ethereum set to merge onto the beacon chain this year, which uses proof of stake instead of proof of work, we’ll see if 2022 brings lower gas fees and retail’s return to Ethereum if the merge is successful.
Dog Coins Meme their Way to the Top
While many new cryptocurrencies with strong functionality and unique use-cases were rewarded with strong returns, it was memes that powered the greatest returns in cryptocurrencies this past year.
Dogecoin’s surge after Elon Musk’s “adoption” saw many other dog coins follow, with SHIB benefitting the most and returning an astounding 19.85 million percent.
But ever since Dogecoin’s run from $0.07 to a high of $0.74 in Q2 of last year, the original meme coin’s price has slowly bled -77% down to $0.17 at the time of writing. After the roller coaster ride of last year, 2022 started with a positive catalyst for Dogecoin holders as Elon Musk announced DOGE can be used to purchase Tesla merchandise.
Gamifying the Crypto Industry
The intersection between crypto, games, and the metaverse became more than just a pipe dream in 2021. Axie Infinity was the first crypto native game to successfully establish a play to earn structure that combines its native token (AXS) and in-game NFTs, becoming a sensation and source of income for many in the Philippines.
Other crypto gaming projects like Defi Kingdoms are putting recognizable game interfaces on decentralized finance applications, with the decentralized exchange becoming the town’s “marketplace” and yield farms being the “gardens” where yield is harvested. This fantasy aesthetic is more than just a new coat of paint, as the project with $1.04B of total value locked is developing an underlying play-to-earn game.
Along with gamification, 2021 saw crypto native and non-crypto developers put a big emphasis on the digital worlds or metaverses users will inhabit. Facebook’s name change to Meta resulted in the two prominent metaverse projects The Sandbox (SAND) and Decentraland (MANA) surge another few hundred percent to finish off the year at 16,261% and 4,104% returns respectively.
With so many eyes on the crypto sector after the 2021’s breakout year, we’ll see how developing U.S. regulation and changing macro conditions affect cryptocurrencies in 2022.
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