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Consumer debt

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BERJAYA
Consumer and Government Debt as a % of GDP (United States)
BERJAYA
Personal savings & consumer credit in the US
  Personal savings rate (left)
  Revolving credit (right)
BERJAYA
Consumer leverage ratio

In economics, consumer debt is the amount owed by consumers (as opposed to amounts owed by businesses or governments). It includes debts incurred on purchase of goods that are consumable and/or do not appreciate. In macroeconomic terms, it is debt which is used to fund consumption rather than investment.[1]

The most common forms of consumer debt are credit card debt, payday loans, student loans and other consumer finance, which are often at higher interest rates than long-term secured loans, such as mortgages.

Long-term consumer debt is often considered fiscally suboptimal. While some consumer items such as automobiles may be marketed as having high levels of utility that justify incurring short-term debt, most consumer goods are not. For example, incurring high-interest consumer debt through buying a big-screen television "now", rather than saving for it, cannot usually be financially justified by the subjective benefits of having the television early.

In many countries, the ease with which individuals can accumulate consumer debt beyond their means to repay has led to a growth in the debt consolidation industry and credit counseling.[2] Debt also leads to a lower credit score and may have effects on mental health.

The amount of debt outstanding versus the consumer's disposable income is expressed as the consumer leverage ratio. On a monthly basis, this debt ratio is advised to be no more than 20 percent of an individual's take-home pay.[3] The interest rate charged depends on a range of factors, including the economic climate, perceived ability of the customer to repay, competitive pressures from other lenders, and the inherent structure and security of the credit product. Rates generally range from 0.25 percent above base rate, to well into double figures. Consumer debt is also associated with predatory lending, although there is much debate as to what exactly constitutes predatory lending.

In recent years, an alternative analysis might view consumer debt as a way to increase domestic production, on the grounds that if credit is easily available, the increased demand for consumer goods should cause an increase in overall domestic production. The permanent income hypothesis suggests that consumers take debt to smooth consumption throughout their lives, borrowing to finance expenditures (particularly housing and schooling) earlier in their lives and paying down debt during higher-earning periods.

Personal debt is on the rise, particularly in the United States and the United Kingdom. According to the US Federal Reserve's 2024 statistics, the US household debt service ratio was at its lowest level since its peak in the Fall of 2007 in 2021, but has since risen.[4]

Debt-to-GDP ratio, consumer leverage ratio

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A country's private debt can be measured as a 'debt-to-GDP ratio', which is the total outstanding private debt of its residents divided by that nation's annual GDP. A variant is the consumer leverage ratio, which is the ratio of debt to personal income.

List of countries

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List of countries by consumer debt as % of GDP
Country/Region 1960[5] 2016[6]
BERJAYA Afghanistan  – 3.6
BERJAYA Albania  – 34.5
BERJAYA Algeria  – 23.5
BERJAYA American Samoa (US)  –  –
BERJAYA Andorra  –  –
BERJAYA Angola  – 21.0
BERJAYA Antigua and Barbuda  – 48.3
BERJAYA Argentina  – 14.0
BERJAYA Armenia  – 48.9
BERJAYA Aruba (Netherlands)  –  –
BERJAYA Australia  – 142.9
BERJAYA Austria  – 85.6
BERJAYA Azerbaijan  – 26.6
BERJAYA Bahamas, The  – 68.2
BERJAYA Bahrain  –  –
BERJAYA Bangladesh  – 44.4
BERJAYA Barbados  –  –
BERJAYA Belarus  – 25.9
BERJAYA Belgium  – 64.7
BERJAYA Belize  – 56.8
BERJAYA Benin  – 21.8
BERJAYA Bermuda (UK)  –  –
BERJAYA Bhutan  – 46.5
BERJAYA Bolivia  – 64.2
BERJAYA Bosnia and Herzegovina  – 54.3
BERJAYA Botswana  – 32.3
BERJAYA Brazil  – 62.2
BERJAYA British Virgin Islands (UK)  –  –
BERJAYA Brunei  – 44.3
BERJAYA Bulgaria  – 53.6
BERJAYA Burkina Faso  – 26.6
BERJAYA Burundi  – 16.7
BERJAYA Cabo Verde  – 63.0
BERJAYA Cambodia  – 69.7
BERJAYA Cameroon  – 20.8
BERJAYA Canada  –  –
BERJAYA Cayman Islands (UK)  –  –
BERJAYA Central African Republic 11.2 12.8
BERJAYA Chad 3.5 10.2
 Channel Islands (UK)  –  –
BERJAYA Chile 22.1 112.1
BERJAYA China  – 156.7
BERJAYA Colombia 22.9 47.1
BERJAYA Comoros  – 26.5
BERJAYA Congo, Dem. Rep.  – 7.8
BERJAYA Congo, Rep. 22.2 25.0
BERJAYA Costa Rica 27.0 59.3
BERJAYA Côte d'Ivoire  – 22.7
BERJAYA Croatia  – 61.6
BERJAYA Cuba  –  –
BERJAYA Curaçao (Netherlands)  –  –
BERJAYA Cyprus  – 230.1
BERJAYA Czech Republic  – 51.8
BERJAYA Denmark 44.5  –
BERJAYA Djibouti  –  –
BERJAYA Dominica  – 51.5
BERJAYA Dominican Republic 5.8 28.4
BERJAYA Ecuador 25.6 29.4
BERJAYA Egypt  – 34.1
BERJAYA El Salvador  – 45.6
BERJAYA Equatorial Guinea  – 19.1
BERJAYA Eritrea  –  –
BERJAYA Estonia  – 72.6
BERJAYA Eswatini (Swaziland)  – 21.6
BERJAYA Ethiopia  –  –
BERJAYA Faroe Islands (Denmark)  –  –
BERJAYA Fiji  – 89.9
BERJAYA Finland 36.8 95.5
BERJAYA France 20.0 97.6
BERJAYA French Polynesia (France)  –  –
BERJAYA Gabon 8.2 13.6
BERJAYA Gambia, The  –  –
BERJAYA Georgia  – 62.0
BERJAYA Germany  – 77.5
BERJAYA Ghana 4.6 19.6
BERJAYA Gibraltar  –  –
BERJAYA Greece 12.2 107.7
BERJAYA Greenland (Denmark)  –  –
BERJAYA Grenada  – 56.1
BERJAYA Guam (US)  –  –
BERJAYA Guatemala 10.1 34.3
BERJAYA Guinea  – 12.9
BERJAYA Guinea-Bissau  – 7.1
BERJAYA Guyana 11.2 45.5
BERJAYA Haiti  – 18.3
BERJAYA Honduras 9.9 56.3
BERJAYA Hong Kong  – 203.8
BERJAYA Hungary  – 34.9
BERJAYA Iceland 46.9 87.3
BERJAYA India 7.9 49.8
BERJAYA Indonesia  – 39.4
BERJAYA Iran 12.9  –
BERJAYA Iraq 8.5  –
BERJAYA Ireland 30.1 49.2
BERJAYA Isle of Man (UK)  –  –
BERJAYA Israel 13.5 65.4
BERJAYA Italy  – 86.1
BERJAYA Jamaica 15.7 32.1
BERJAYA Japan 56.3 185.0
BERJAYA Jordan  – 75.1
BERJAYA Kazakhstan  – 34.3
BERJAYA Kenya  – 32.9
BERJAYA Kiribati  –  –
BERJAYA North Korea  –  –
BERJAYA South Korea 5.7 143.3
BERJAYA Kosovo  – 39.3
BERJAYA Kuwait  –  –
BERJAYA Kyrgyzstan  – 21.2
BERJAYA Laos  –  –
BERJAYA Latvia  – 67.4
BERJAYA Lebanon  – 111.9
BERJAYA Lesotho  – 17.5
BERJAYA Liberia  –  –
BERJAYA Libya  –  –
BERJAYA Liechtenstein  –  –
BERJAYA Lithuania  – 43.0
BERJAYA Luxembourg  – 100.1
BERJAYA Macau  – 118.1
BERJAYA Madagascar  – 13.2
BERJAYA Malawi  – 10.5
BERJAYA Malaysia 8.9 124.0
BERJAYA Maldives  – 37.3
BERJAYA Mali  – 25.4
BERJAYA Malta  – 87.1
BERJAYA Marshall Islands  –  –
BERJAYA Mauritania  –  –
BERJAYA Mauritius  – 96.4
BERJAYA Mexico 20.6 35.0
BERJAYA Micronesia, Fed. Sts.  – 23.4
BERJAYA Moldova  – 30.6
BERJAYA Monaco  –  –
BERJAYA Mongolia  – 58.7
BERJAYA Montenegro  – 51.2
BERJAYA Morocco 12.0 65.4
BERJAYA Mozambique  – 34.5
BERJAYA Myanmar 6.2 20.7
BERJAYA Namibia  – 56.7
BERJAYA Nauru  –  –
BERJAYA   Nepal 1.0 81.0
BERJAYA Netherlands 18.4 111.2
BERJAYA New Caledonia (France)  –  –
BERJAYA New Zealand 15.5  –
BERJAYA Nicaragua 15.4 38.7
BERJAYA Niger  – 13.7
BERJAYA Nigeria 3.7 15.7
BERJAYA North Macedonia  – 47.4
BERJAYA Northern Mariana Islands (US)  –  –
BERJAYA Norway 32.7 145.0
BERJAYA Oman  – 75.6
BERJAYA Pakistan 11.1 16.2
BERJAYA Palau  –  –
BERJAYA Palestinian territories  – 42.0
BERJAYA Panama 17.8 91.0
BERJAYA Papua New Guinea  –  –
BERJAYA Paraguay 9.1 54.4
BERJAYA Peru 12.5 36.2
BERJAYA Philippines 12.0 44.7
BERJAYA Poland  – 54.8
BERJAYA Portugal 39.5 112.2
BERJAYA Puerto Rico (US)  –  –
BERJAYA Qatar  – 79.4
BERJAYA Romania  – 28.2
BERJAYA Russia  –  –
BERJAYA Rwanda  – 21.2
BERJAYA Samoa  – 80.1
BERJAYA San Marino  –  –
BERJAYA São Tomé and Príncipe  – 26.4
BERJAYA Saudi Arabia  – 58.0
BERJAYA Senegal 14.8 33.1
BERJAYA Serbia  – 44.1
BERJAYA Seychelles  – 26.9
BERJAYA Sierra Leone 2.8 5.6
BERJAYA Singapore  – 132.9
BERJAYA Sint Maarten (Netherlands)  –  –
BERJAYA Slovakia  – 57.1
BERJAYA Slovenia  – 47.4
BERJAYA Solomon Islands  – 39.0
BERJAYA Somalia  –  –
BERJAYA South Africa  – 144.7
BERJAYA South Sudan  –  –
BERJAYA Spain 31.4 111.8
BERJAYA Sri Lanka 7.3 46.0
BERJAYA St. Kitts and Nevis  – 56.5
BERJAYA St. Lucia  – 86.8
BERJAYA Collectivity of Saint Martin (France)  –  –
BERJAYA St. Vincent and the Grenadines  – 50.8
BERJAYA Sudan 8.9 8.9
BERJAYA Suriname  – 33.3
BERJAYA Sweden 38.2 129.6
BERJAYA  Switzerland 96.0 177.7
BERJAYA Syria 25.3  –
BERJAYA Taiwan  –  –
BERJAYA Tajikistan  – 19.2
BERJAYA Tanzania  – 14.3
BERJAYA Thailand 10.1 147.4
BERJAYA Timor-Leste  –  –
BERJAYA Togo  – 39.3
BERJAYA Tonga  – 38.1
BERJAYA Trinidad and Tobago 8.5 41.3
BERJAYA Tunisia  – 81.2
BERJAYA Turkey 17.7 70.3
BERJAYA Turkmenistan  –  –
BERJAYA Turks and Caicos Islands (UK)  –  –
BERJAYA Tuvalu  –  –
BERJAYA Uganda 6.5 13.7
BERJAYA Ukraine  – 47.3
BERJAYA United Arab Emirates  – 85.9
BERJAYA United Kingdom 17.6 135.9
BERJAYA United States 70.9 192.7
BERJAYA Uruguay 31.0 28.2
BERJAYA Uzbekistan  –  –
BERJAYA Vanuatu  – 68.5
BERJAYA Venezuela 14.0  –
BERJAYA Vietnam  – 123.8
BERJAYA US Virgin Islands (US)  –  –
BERJAYA Yemen  –  –
BERJAYA Zambia  – 13.0
BERJAYA Zimbabwe  –  –

See also

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Further reading

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  • Surviving Debt. National Consumer Law Center. 2024. ISBN 978-1-60248-213-5. - a freely available guide to managing consumer debt, aimed at consumers

References

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  1. ↑ "Consumer Debt Definition". Investopedia. Retrieved August 24, 2011.
  2. ↑ "What is debt consolidation?". Achieve. Retrieved 2026-03-27.
  3. ↑ "Alternatives to Filing for Bankruptcy". www.moneymanagement.org. Retrieved 2016-07-29.
  4. ↑ US Federal Reserve. "Household Debt Service and Financial Obligations Ratios". Household Debt Service and Financial Obligations Ratios. Retrieved 10 February 2025.
  5. ↑ "Domestic credit to private sector (% of GDP) | Data".
  6. ↑ "Domestic credit to private sector (% of GDP) | Data".
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