American Consumers Are Paying Their Credit Card Bills On Time

It is no rocket science that American consumers have been staunch supports of anything and everything Credit. Possibly a result of the aggressive marketing by the financial sector, every personal finance blog that you come to read from US bloggers invariably focuses on getting the Credit Card Debt in order

The ongoing economic crisis seems to have caused a sea change in the consumer patterns as far as Credit Card debt is considered.

Credit Card Debt has dropped to its lowest levels in 8 years for this years second quarter

Apparently, consumers are no more putting off their credit card payments and are timely paying off their dues in uncertain economy.

Here are some salient facts highlighting the improving credit card debt situation in US

• The average combined debt for bank-issued credit cards -- like those with a MasterCard or Visa logo, fell to $4,951 in the three months ended June 30, down more than 13 percent from $5,719 in the same period a year ago
• Albama came at the top as far as paying the debt is concerned. The average credit card balance dropped a whopping 27%
• Albama though has the highest debt rate reported a reduction of 7%
• Not only are the customers paying off their credit card debt on time, there has been a notable reduction in the number of new credit cards being applied for. The number of new accounts has dropped from 6.5% from last year

What could be the reason for the reduction in Credit Card Debt

• Credit rating plays a critical role in determining the financial stability of an individual. With the ongoing economic crisis and unemployment looming large, consumers would be looking to keep their credit rating high as as borrowing cash against property might come in difficult
• Foreclosure crisis has also been highlighted as one one reasons for improvement in credit card payments. As people no more have to use mortgage payments, they have an extra cash cushion and they can utilize that for making card payments

The reduction in credit card debt may not be a breakthrough achievement in itself but is sure a step in the right direction. With consumers looking to clear off their credit card debts, there are chances that they will be not keep on piling debt on their cards.

Source

Subscribe to Our RSS Feeds for regular updates or follow us Twitter or become a fan on Facebook