US Credit Card Balances Declining
The latest data from credit reporter Equifax shows that US consumer credit balances have fallen significantly since July 2010. The company reported the following trends: Bank credit card write-offs peaked at nearly 13% in July 2010 and retail credit card…
The latest data from credit reporter Equifax shows that US consumer credit balances have fallen significantly since July 2010. The company reported the following trends:
- Bank credit card write-offs peaked at nearly 13% in July 2010 and retail credit card write-offs peaked at more than 14% in July 2010.
- Bank credit card write-offs currently stand at 5.53% (39% lower than 2010 levels) and retail credit card write-offs are at 8.4% (representing a 26% decline over 2010 levels).
- Cumulative revolving card balances peaked in October 2008 at more than $752 billion, and despite a recent uptick attributable to seasonal purchase activity, have since declined by almost 20% (December 2011 cumulative revolving card balances stand at $604 billion).
- Total consumer debt outstanding (which includes First Mortgage, Home Equity, Consumer Finance, Auto, Student Loan, Retail Credit Card and Bank Credit Card) also peaked in October 2008 at $12.4 trillion, and in December 2011, U.S. consumers carried $11.1 trillion in total consumer debt, representing a decrease of more than 10%.
An Equifax official also noted:
The industry is experiencing sustained improvement in consumers’ payment behavior and overall reduction of debt, a trend that seems to indicate more responsible lending and borrowing habits among card issuers and consumers alike.
The Equifax data appears to be roughly in-line with the report on consumer credit released earlier this week by the Federal Reserve.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
