SUERF Policy Brief - No 828, March 2024

Using data from two waves of the Household Finance and Consumption Survey (HFCS), I examine the distribution of consumer debt and credit card ownership across demographic groups in Luxembourg, its neighboring countries (Belgium, France and Germany), and the euro area as a whole.1 Recent HFCS data identifies Luxembourg as one of the EU countries with substantial consumer debt among low- income hous. [...] The main component of consumer debt is installment loans, held by 26% of households in Luxembourg and 20% in the euro area as a whole. [...] According to HFCS data, the average ratio of installment loans to household gross income is approximately 16% in Luxembourg and in neighboring countries, and 17% in the euro area as a whole. [...] www.suerf.org/policynotes SUERF Policy Brief, No 828 3 Consumer debt in Luxembourg and the euro area The difference in the level of consumer debt may also reflect expected income growth (Permanent Income Hypothesis) or a desire to “keep up with the Joneses”. [...] www.suerf.org/policynotes SUERF Policy Brief, No 828 5 Consumer debt in Luxembourg and the euro area About the author Giuseppe Pulina is a Senior Economist in the Economics and Research Department at the Central Bank of Luxembourg and a Research Fellow at the University of Luxembourg.