The robust growth in household debt in pre-crisis period coincided with real growth in
household disposable income, large economic expansion and a considerable fall in banks’
interest rates. However, household debt indicators deteriorated markedly as total household
debt grew faster than income. This raised concerns about potential implications of an
additional increase in the debt burden on fi nancial stability. An analysis of household debt
based exclusively on data aggregated at the sector level is not a best fi nancial vulnerability
indicator as it fails to provide insight into the distribution of debt and credit risk by individual
household groups. The text explains the problems with personal over-indebtedness
in Croatia and measures for their reduction.