U.S. consumers underestimate their credit card debts

American households may be underestimating the extent of their credit card debt - a trend that may be reflective of recent market uncertainty and consumer reluctance.

American households may be underestimating the extent of their credit card debt - a trend that may be reflective of recent market uncertainty and consumer reluctance.

While retail sales improved more than expected in September, debt - both in terms of credit cards and student loans - continues to plague consumer spending, which accounts for two-thirds of the U.S. economy and may be hindering its recovery.

According to a report released this week by the Federal Reserve Bank of New York, only 50 percent of U.S. households report owing any credit card debt at all. However, credit card companies report that 76 percent of households owe them money.

"The news suggests many Americans still have some progress to make in the area of financial literacy, a subject that rose to national prominence in the wake of the Great Recession," reports the Zimbabwe Gaurdian.

Other analysts are calling into question the accuracy of the Fed’s Survey of Consumer Finances, widely treated as an authoritative source.

Either way, most experts agree consumer activity is unlikely to return to pre-recession figures until the labor market improves.