Executive Summary

In a survey of 1,000 adults, we find a public widely aware of the problem of growing household debt and overwhelmingly supporting solutions to this issue. The public’s concern over this issue results from perceptions of an economy performing unevenly, from perceptions of rising costs of living, and for a surprising and pressing number, from first-hand experience with excess or unmanageable debt. Despite the prominence of pay-day loan artists and other debt merchants in low-income neighborhoods throughout the country, the public does not see this is as a “lower class" problem, but a growing threat to the American middle class and the American dream.

Several lenders draw intense criticism of the public, including pay-day lenders, car finance companies and credit card companies. The practice of universal default—where credit card companies can raise your interest rates even if you never missed a payment, based on your behavior in other areas—is near universally condemned by respondents in this study.

At the same time, the public does not discount the importance of individual responsibility when it comes to solving this problem. More so than the lenders or even the economy, respondents hold individual borrowers responsible for the debt problem, and, naturally, the public responds enthusiastically to solutions that attempt to educate borrowers and improve financial decision-making at the household level.

Methodology

This survey represents the views of 1,000 adults, age 18 and over, taken between April 13 and April 20, 2006. The survey carries a margin of error of +/- 3.1 percent.

Key Findings

• The public recognizes the seriousness of the debt issue. Nearly half describe household debt on items like credit cards, car loans, home mortgages and payday loans a very serious problem in this country and 82 percent describe it as at least a somewhat serious problem.
• By a whopping 79 to 19 percent margin, the public insists this is a problem for middle class families, rather than a problem primarily for lower income families.
• The public is more worried about falling into debt, particularly through medical bills, than about being the victim of a terrorist attack or natural disaster.