A new study by the Federal Reserve indicates that the median American net worth suffered significantly through the 2007 to 2010 period. By the numbers, American family net worth fell from $126,400 in 2007 to $77,300 in 2010.
The decline isn't as pronounced as it seems. By the Federal Reserve's own admission, much of the declines in net worth can be attributed to falling housing prices. Also, 2007-2010 was one of the worst periods for stock market returns in decades.
Since 2010, the stock market has almost completely recovered. Housing has slowed its continued decline, while lower rates make refinancing a popular option for people who want to lower their monthly interest expenses.
Credit Card Bright Spot
According to the 2010 Survey of Consumer Finances released to the public on Monday, 39.4% of families reported having a credit card with a balance on it. This was down substantially from the 2007 report released in 2009 in which 46.1% of American families owned at least one credit card with a balance.
Consumers are also embracing safety. More families report saving for liquidity purposes - an indication that personal finance issues are still at the forefront of consumer's minds when it comes to savings. In this case, liquidity means that savers are stuffing savings accounts to save for a rainy day - savings that personal finance experts would label as emergency savings.
The median amount of credit card debt held by American families also fell by $400, from $3,000 to $2,600. The average amount also fell, though by a much smaller margin, from $7,300 to $7,100. Smaller credit card balances give consumers more breathing room in their budgets as income growth remains negative.
All told, American families did report having fewer credit cards in 2010 than in 2007. Some 32.7% of families had four or more credit cards in 2010 compared to 35% in 2007.