Americans Are Reducing Credit Card Debt


According to TransUnion, a credit bureau, consumer credit card debt in the U.S. has decreased to $4,699 per borrower. This represents a 5% decrease since the second quarter of 2010, and is near a 10 year low. The decrease is considered positive news for the struggling economy. Additionally, the number of borrowers who were at least 90 days late with their credit card payments decreased 0.6% over the same period. This represents a 17 year low.

The decrease in credit card debt can be attributed to both lenders and borrowers. Lenders have decreased debt by writing off debt that has become uncollectible, closing bad accounts, and reducing credit offered to risky borrowers. Consumers have also been responsible for decreasing credit card debt by making their payments. From the first quarter of 2009 to the first quarter of 2010, Americans made $72 billion more in payments on their credit cards than purchases. That is comparable to $86.6 billion in write offs by lenders.

DailyFinance.com offers five tips to get out of credit card debt. First, track your income and spending. It is important to make a budget for 30 or 60 days to find money you can use to pay off your debt. Second, keep track of the details. Use online calculators to find out how much an extra few hundred dollars in payment will make. If you come in under budget for the month use the extra money to pay off debt. Third, contact your lenders to see if they will reduce your interest rate. Fourth, start with the highest interest rate card and pay off your debt in order of interest rate. Finally, when you get out of debt put the money used to make payments in a savings account. You should save enough money to cover three months of expenses, so an emergency does not put you back into debt.

 

 

Source:

Laura Rowley, U.S. Consumers Pay Down Their Credit Card Debts, https://www.dailyfinance.com/2011/08/17/u-s-credit-card-debt-declines/ (accessed August 24, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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