National credit card debt drops after 8 years above $5,000

Brace yourself, I bear non-apocalyptic news about personal debt. Well, sort of.

     The national average credit card debt per consumer has dropped in this year’s second quarter to $4,951—the lowest it’s been since the first quarter of 2002.

     TransUnion reported that the debt for bank-ordered credit cards has fallen over 13% from last year’s average of $5,719. In today’s unstable economy, it’s no surprise that cardholders are taking their monthly payments more seriously.

     Many states made tremendous improvements on their average credit balance, such as Alabama, whose residents reduced their debt by 27%. Though this is great news, the underlying causes behind the increase in credit payments might not be as comforting.   

     One reason that people could have the extra money, for example, is that the housing crisis forced a foreclosure on their homes. Paying off a credit card suddenly isn’t so difficult when there aren’t any mortgage payments to make. Others are paying closer attention to their credit score these days due to general economic stress factors, like salary cuts and rising unemployment rates.

     In addition to the reduction in credit debt, consumers in general are applying less and less for credit cards; the rate of new account openings has decreased over 6% from 2009.

     Looks like America just wants to play it safe for now. For more information on credit cards, click here.

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