Press Release: Cambridge Consumer Credit Index
July 9, 2002
ISLANDIA, NY -- Just over half of all Americans (51%) are planning to take a vacation more than 75 miles from home,
and nearly one quarter of them (23%) are charging their vacations on credit cards, according to the results of
a nationwide survey by the Cambridge Consumer Credit Index. Nearly two-thirds (65%) will pay for their vacations
out of checking or savings accounts and merely 1% will either borrow money from friends or withdraw funds from
investment accounts.
However, older and higher-income Americans are using their credit cards far more to pay for their vacations. Of
those age 65 or older, 40% are putting their holiday expenses on plastic, while 38% of those earning more than
$75,000 are charging their getaways. These findings are the result of monthly nationwide telephone poll of 1000+
adults conducted by ICR/International Communications Research in the past week, sponsored by The Debt Relief Clearinghouse.
"Clearly wealthier and older Americans are vacationing far more than lower-income and younger Americans, and
when on holiday they are feeling free to use their credit cards much more," says Jordan Goodman, spokesperson
for the Index.
In the month of July, the Index surged by 6 points from June levels, meaning that Americans are taking on an increasing
debt load. This rise comes on top of another 6 point gain in June, meaning that the Index has soared 12 points
over the last two months to the highest level since the Index was launched in December 2001.
The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt.
It is released on the fifth business day of every month to coincide with the Federal Reserve Board's G19 release
of consumer credit outstanding data. In conjunction with the Index, the Cambridge Credit Counseling Corporation
is releasing its monthly survey of people who have called it for credit counseling services over the past month.
Cambridge representatives ask callers for the primary reason that they found it necessary to get help with their
debts now. Of the 1406 people who answered, this was the order of their responses:
1. I am frustrated with high bank rates and fees (29%)
2. My income has been reduced from a lower salary, less overtime or layoff
(22%)
3. I want to improve my ability to achieve future financial goals like
buying a house or saving for retirement (14%)
4. I got into too much debt by overspending (12%)
5. My lack of financial education caused me to take on too much debt
(10%)
6. Large medical expenses forced me to take on huge debts (5%)
7. Other reasons (4%)
8. My recent divorce or widowhood forced me to take on large debts (4%)
For more information on the survey see http://www.cambridgeconsumerindex.com/camsurveyasp
The Cambridge Consumer Credit index number is composite of these three questions:
1. In the past month, have you taken on more debt or paid off debt?
The Index reads 72 on this question, a jump of 12 points from June.
In July, 36% of Americans say they have taken on more debt, with 23%
taking on a little and 12% taking on a lot more debt. Conversely, 64%
of Americans have paid off debt, with 47% paying off a little and 17%
paying off a lot. In June 30% of consumers had taken on more debt
while 70% had paid off debt, indicating that the number of Americans
taking on debt is up for the two consecutive months.
2. In the next month, do you anticipate taking on more debt or paying off
debt?
The Index reads 42 on this question, up four points from June.
In July, 21% plan to take on more debt, with 7% planning to take on a
lot and 14% planning to take on a little debt. Conversely, 79% plan to
pay off debt, with 59% paying off a little and 20% paying off a lot.
In June, 19% planned to take on debt and 81% planned to pay off debt.
3. In the next six months, do you expect to take on debt because you are
thinking of making a major purchase such as a car, education,
appliance, medical procedure, furniture or carpeting?
The Index reads 74 on this question, up by 2 points from June. In
July, 37% of Americans plan to take on more debt to make such
purchases, with 13% taking on a lot of debt and 24% taking on a little
more debt. In contrast, 63% of Americans plan to pay off debt in the
next six months, with 44% expecting to pay off a little and 19%
expecting to pay off a lot. In June, 36% of Americans planned to take
on more debt, while 64% planned to payoff debt.
"It is striking that every month more Americans say they are going to pay off debt than actually do so.
For example, a month ago while 81% of Americans said they were going to pay off debt, only 64% actually did so.
This 17 percentage point spread in the 'Reality Gap' widened from 13 percentage points a month ago. This shows
that while many Americans have the best of intentions to pay off debts, the reality is that many of them are sinking
deeper into debt every month," says Jordan Goodman, spokesperson for the Index.
For more information about the Cambridge Consumer Credit Index, contact Media Relations Representative Paramjit
Mahli at pmahli@cambridgecredit.org or 800-804-0575, or economist Allen Grommet, who provides an economic analysis
of Index results, at agrommet@cambridgecredit.org or 800-804-0575, or the Index website at http://www.cambridgeconsumerindex.com.
Consumers wishing to find out more about Debt Relief Clearinghouse referral services should call 1-888-4DEBTHELP
or visit http://www.debtreliefonline.com.
SOURCE: Cambridge Consumer Credit Index