Many US families have debt problem.

David MoonBlog

Of the 250 million Americans over the age of 15, the National Retail Federation projects that 140.1 million of us will go shopping this weekend, spending more than $50 billion over the four days, or $357 per person. Adding the rest of holiday shopping, Americans are expected to spend a total of $804 on gifts this year.

Newspapers and magazines this time of year run their obligatory annual “tips to avoid getting into credit card problems” articles. Carry cash. Make a budget. Tie a string on your finger. Boil an eye of a newt and frog toe.

No number of incantations and tricks, however, can replace this one simple plan: only spend what you can afford.

If you have an extra $804 laying around, feel free to spend it. If not, don’t.

I’m a typical man, so shopping is, to me, an activity of purpose, not one of leisure. Shopping is what you do when you need something that someone else is offering for sale. You go to a store, purchase the thing and then go home. Whenever possible, I shop online, so as to free up more time for activities that are more pleasurable, like having a tooth pulled or serving as a waterboarding test subject.

But this isn’t a laughing matter. A 2008 academic paper in the Journal of Consumer Research found that oniomania, a compulsive desire to shop, afflicts approximately 9 percent of Americans—or the same percentage who suffer from diabetes.

Like diabetes, compulsive shopping leads to a plethora of related problems, including unsustainable debt levels.

There are two general schools of thought regarding the 2008 recession. Some people blame the economic contraction on bankers and other lenders who, either because of their greed or naiveté, were eager to loan money to people who couldn’t reasonably afford to borrow it.

The other school of thought blames the recession on borrowers who were too greedy or naïve not to know their own practical debt limits.

But there is no disagreement that the core economic problem in 2008 was an overabundance of debt, not a lack of consumer demand.

Prior to the 2008 recession, consumer credit in the US totaled $2.6 trillion. Mostly as a result of write-offs and defaults, the figure declined to $2.4 trillion by July 2010.

Since then, consumer credit has increased 33 percent, to $3.2 trillion. That increase is not spread equally among households. Slightly over half of all households carry no credit card debt. Of the 47 percent of households that do carry card balances, the average balance is $15,257.

The average interest rate on all variable rate cards is currently 15.2 percent, meaning these indebted households are paying almost $200 a month in non-deductible interest expense.

Apparently a relatively small number of households have a very significant problem.