Originally Posted by CatsCradle
I don't think that student loans are considered "consumer debt." Consumer debt in my experience is debt acquired through consumption (purchases). In the states, student loans are considered more of an investment because you are supposed to be getting long term returns on your loan. Student loans are treated much like property mortgages. People can repossess your car and your television and foreclose on all your material possessions, but they can't take away what you have learned. Property ownership is not considered "consumer debt" either. Consumer debt can range from credit card purchases to non-credit card credit at stores to loans that are not considered home improvement loans via a bank mortgage. I do know people who have taken out non-bank-home improvement loans to improve their properties (kitchen and bathroom upgrades/new deck/new roof). Those kinds of loans add up fast. In many cases, though, people borrow against their mortgages for home improvements - but I don't think that is considered "consumer" debt per se - it still falls under the whole property ownership/mortgage thingy. Consumer debt involves outright purchase with no appreciation on the purchase (in most cases).
I read the rest of the article, and it didn't mention student loans. I think it's loan/instalment purchases (eg. a car), lines of credit and credit cards.
For a while in our early days, DH and I carried a high credit card debt on one of our cards because of DH's dental work. He had to have a lot of emergency dental work that was not covered by insurance and we racked up 10k easily. Thankfully we were able to pay that off, but I think our situation was typical. From what I've read, non-insurance related medical costs are the number reason for high credit card debt in the states.
Yes - I know that's a big problem, but it's really not very common here. People can, and do, have high medical costs (certain prescriptions, dental work, etc.), but I don't think it's common enough to drive that kind of average debt, yk?
Now, that doesn't mean that there isn't problem with other consumer debt such as purchasing beyond one's means. Sometimes I'm rather shocked at what people can "afford." DH and I tend to be incredibly conservative in what we buy - we were probably the last people in our town to own a tube television - which died two weeks ago at the tender age of 17!
My television died in 2007, at the age of 16. We couldn't afford to replace it, but did so, anyway...because it was just a few weeks after Aaron died, and we were leaning on the tv pretty heavily, for all kinds of things (comedies to cheer us up, kids shows to distract the kids so I could rest and recuperate, etc.). I was horrified at the cost (mind you, our "new" tv was/is also bigger than I'd have preferred...but the next smaller size was only marginally cheaper and a bigger screen helps dh, as he has poor vision). I'm hoping this one will last at least as long as my last one.
Credit card debt is a huge problem in U.S., but it is multi-faceted. Too many people have too many reasons why they rack up credit card (which is considered consumer) debt. I can't really judge because as I stated above, DH and I used our credit cards for things that were important to us at the time (that didn't involve expensive handbags or luxury travel) and my bigger concern is the what I consider the usury by credit card companies that keep people in debt forever. But that's a subject for another time and place. :)
Credit card interest rates and practices are appalling - no doubt about it.