According to the Federal Reserve's 2007 Survey of Consumer Finances, credit card debt accounts for only 3.5% of all household debt.

Background Info

Credit cards are unique financial tools that allow people and small businesses to borrow small amounts of money without any collateral.  Several different federal laws and regulations seek to keep a level playing field between card issuers and their customers – with a dozen separate rules protecting consumers from fraud and unfair practices every day.

The credit card market has evolved significantly over the past half century, becoming more efficient and giving consumers a variety of choices for their financing needs. As recently as the early 1990's, most credit cards had high fixed rates and were available only to affluent consumers. However, increased competition and risk-based pricing have led to lower prices and expanded access to credit.

Securitization – the packaging and sale of credit card loans – serves as a vital source of funding for credit card issuers and has helped fuel this expansion.  By 2008, roughly half of all credit card loans were funded by securitization.    However, recent problems in the financial markets have severely limited the ability of issuers to rely on securitization, leading to increased costs and a riskier lending environment.