U.S. Consumers Shed 11% of Credit Card Debt

by San Antonio Attorney

Consumers cut down credit card debt by 11% in 2011. The average credit card debt of consumers last year was $6,576, which was $7,404 in the previous year, based on a data from financial education and credit tracking website CreditKarma.com.

The drop was caused by a weakened confidence of consumers that have been spending in cash and check to tighten up their credit and reduce credit limits, according to Ken Lin, CEO of Credit Karma.

In 2010, credit card debt had reduced as well, sliding 7% in that year.

However, this trend will probably not continue for a long time. According to Credit Karma CEO Ken Lin, while the economy is recovering, debt is probably going to come back with it, since banks recently began easing their credit requirements once again.

Lin believes that consumers are near towards the bottom level of the debt trend.

In Wisconsin, the average credit card debt of consumers in 2011 was $5,062. It was the lowest in all of the states.

Alabama and Mississippi followed. They also had the greatest reductions, with people decreasing their credit card balances by 16% and 23% respectively.

Alaska, on the other hand, racked up the highest debt. The average credit card balance of residents in the state was $7,937. Connecticut and New Hampshire came behind Alaska.

Unfortunately, consumers did not reduce other kinds of debt in 2011.

Mortgage debt was consistent at an average of $173,876, although levels differ significantly among states.

California had the highest mortgage debt at $313,749 average per person. Residents of West Virginia had the least mortgage it at $104,279 average per person.

Debt on auto loan increased at 2%. Alabama had the highest auto loan debt that increased by 30%.

When the various kinds of debts were put together, the average consumer had $210,236 total debt load by the end of last year, down by just 1% from the previous year.

 

–   Credit card debt is one of the main reasons why consumers file for bankruptcy. If you have excessive credit card debt, bankruptcy may be the best option for you. To help you find out if bankruptcy the right solution for your situation, talk to a San Antonio Bankruptcy attorney.

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