More Than Half of Credit Card Bills Paid Each Month

If you are paying your credit card balances down, join the club. More than half the people in the country are doing that for various reasons.

We have posted on here before about the fact that more and more people are paying their credit cards each month before paying their mortgage. Now, recent studies have shown that about 59 percent of Americans are paying their credit card balances in full every month. That’s a jump of about 13 percent from the previous year. The study included a sample of 150,000 consumers and was conducted by BillShrink.com, a website which offers a number of personal savings tools for people. The numbers just reinforce what the Federal Reserve has been trying to say for months.

Credit card balances dropped by 11.9 percent in December of 2009 to about $8.5 billion. That was the 15th month in a row that there was a decline in credit balances according to reports by the Federal Government.

In total, the amount of consumer debt overall in December of 2009 fell by more than $1.70 billion, which represented nearly a one percent drop. According to Peter Pham, the CEO of BillShrink, consumers learned from the recession and decided to live within their means and spend the money more wisely. Many are even creating emergency funds in case something happens so they do not have to use their credit cards. In addition to that, account holders are seeing the rise in interest rates and fees on their cards as the result of the CARD Act and they are motivated to keeping those fees and rates at a minimum. By paying down their card balances, they can help prevent incurring large fees. The legislation was signed into law by President Obama in May of 2009 and recently took effect on February 22. It includes restrictions on increasing rates retroactively while also allowing account holders to “agree” to overlimit fees by giving them the option of allowing charges to go through that would put them over the limit or asking that those charges get denied in order to avoid the extra financial burden.

Many card holders have simply stopped using their credit cards while paying down their balances. What are some of the things you are doing to avoid getting charged extra fees on your card? Have you been paying down your balances, too? Or are you making the minimum payments so your account can be in good standing in case you need emergency money later on?

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