On average, Americans have told surveyors they had 40 percent less credit card debt than they actually did, according to a new report from New York Fed researchers.
Some of that disparity can be justified by the failure to report business credit card balances that still show up on their credit report, and by the fact that some respondents might not have any credit at all. But even after accounting for these discrepancies, researchers still determined that people underreported their credit card debt by 37 percent.
A group of researchers looked at the Federal Reserve Bank of New York’s venerable Survey of Consumer Finances, or SCF. Possibly the broadest survey of its type, the SCF is relied on by economists to evaluate the average American’s debt load. After comparing SCF debt survey responses from 2001, 2004, 2007, and 2010 with the actual debt levels lenders report to Equifax, one of the three major credit reporting bureaus, researchers saw that Americans do a good job reporting their mortgage and auto loan debt, but that they significantly underreport their credit card debt.
Because the SCF is a survey, its accuracy relies on Americans’ having a clear picture of their debt and reporting their debt honestly. The new report found that these Americans who most significantly underreport their credit card debt live in bigger households.
“The difference in reported credit card use … is significantly and substantially larger for households with three or more adults than for single and two-adult households,” researchers found. “This may be attributable in part to household survey respondents’ greater knowledge of their own debt than of their household members’ debt, and it may offer a partial explanation for the remaining 37 percent gap.”