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Americans making strides to whittle down credit card debt
By Catholic Online (NEWS CONSORTIUM)
January 18th, 2012
Catholic Online (www.catholic.org)
January 18th, 2012
Catholic Online (www.catholic.org)
Americans have finally seen the light - that Mr. Credit Card is not
necessarily your friend. On the whole, U.S. consumers whittled down
credit card debt by 11 percent last year. In addition, average debt
loads dropped in every state of the union.
While the news seems like Americans are becoming more sensible about their spending habits, there's a dark side to current credit card spending. The decline in credit card usage is largely due to weak consumer confidence. Banks continued to tighten their lending and slash credit limits for many existing customers.
Credit card debt had eased in 2010 as well, slipping 7 percent during the year.
The positive trend may not last for long, however. As the economy continues to rebound, Ken Lin, CEO of Credit Karma says that debt is likely to rebound with it, adding that banks have recently started loosening credit requirements again.
"I believe we are just about at the bottom of the debt trend," Lin says.
On average, consumers in Wisconsin had the lowest average credit card debt last year: $5,062.
Mississippi and Alabama were close behind and also posted the biggest declines, with residents reducing their balances by 23 percent and 16 percent, respectively.
Alaska racked up the most credit card debt. Consumers had an average debt load of $7,937. Alaska was followed by New Hampshire and Connecticut.
Other types of debt continue to plague Americans. Mortgage debt remained steady at a national average of $173,876, though levels varied greatly among states.
Californians had the most mortgage debt, with an average of $313,749 per person while West Virginia residents had the lowest level at $104,279. Mortgage debt grew the most in South Dakota, jumping about 12 percent, and dropped the most in Nevada, by 6 percent.
Auto loan debt was the only kind of debt to actually increase, rising from 2 percent to an average of $15,504. Auto loan debt grew highest in Alabama -- by a whopping 30 percent -- to an average of $20,996.
When it was all said and done, the average consumer held a total debt load of $210,236 at the end of 2011, down only about one percent from 2010.
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