People are tightening their financial belts as a result of the recession and putting more cash toward paying off debt. The national average balance on credit cards went down. There are fewer credit card delinquencies, too. It seems that people are able to achieve debt relief by pulling themselves up by their own bootstraps.
Average balance on credit cards falls nationwide
The average balance people are carrying on credit cards has fallen. It has been falling for the last five fiscal quarters in a row. The level of outstanding credit card debt has not only continually fallen, it has fallen to a new eight-year low, according to CNN. That’s a good low point to have in an economy. A lot of people are probably sick of having to run for financial help practically every time they get a credit card bill, and they want to make that worry stop. When a balance is paid off, it increases the credit score of the borrower and leaves that person with one fewer bill.
Good news doesn’t stop there
Not only are balances falling, so are delinquencies. Delinquency rates have fallen to 0.92 percent nationally, meaning fewer people are letting their credit card bills go unpaid. Since last year, that’s a decrease of 21.3 percent. It’s also a 17.1 percent decrease from last quarter. That means that a lot of people put their tax return money toward paying off debt. They didn’t just blow the money on a new flat-screen TV or the latest smartphone. Consumers are doing themselves a favor. Credit card companies must be happy to see more cash coming in and fewer delinquencies.
Lean mean saving machines
Many things, such as Wall Street collapses and sky high rates of foreclosure, have made it abundantly clear that too much debt is a bad thing. Recession or not, there is never a bad time for consumers to free themselves from debt.
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CNN Money: http://money.cnn.com/2010/08/25/news/economy/credit_card_transunion/index.htm
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