Credit Card Debt Sees Largest Drop in 8 years by Magdalena Rosova

Credit card debt in the United States dropped to the lowest level in more then 8 years in this year's second quarter. The average debt fell to $4,951 in June 30, which is 13 percent less from $5,719 in the same period a year ago. This information was brought by TransUnion. This credit reporting agency further said that for the first time ever since the first quarter in 2002 the card debt fell below $5,000. Credit card debt was the highest in Alaska, $7,148. But even there it decreased 7 percent. A total number of 22 states had higher debt than the national average. The lowest credit card debt was in Alabama where it dropped 27 percent to only to $4,753. It seems that borr! owers were more disciplined and made their payments on time. The number of cardholders that were late with the payments fell to 0.92 percent in the second quarter. Last year it was 1.17 percent. For the first time since 2007 this number was below 1 percent. Ezra Becker, director of consulting and strategy in TransUnion's financial services unit, said that the figures proved that consumers were trying to keep their credit cards in good standing. Cardholders are influenced by fear of unemployment and by collapse of housing market, which toughed them that it's harder to cash in on home equity when money gets tight. The delinquency rate was highest in Nevada, then Florida, Arizona and California. The lowest delinquency rate was in North Dakota and South Dakota. Besides paying down debt, consumers are opening less new bank accounts. The number of new accounts dropped 6.5 percent from last year.

related story (sgx18067): http://finance.yahoo.com/news/Credit-card-debt-drops-to-apf-...

by Magdalena Rosova for Cantell TV (http://cantell.tv)

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