Credit Card Performance Improves

[Beet]

A rare piece of good news.

Americans continued to pay down their credit card debt in the second quarter, according a new report from credit tracking firm TransUnion. And although unemployment remains very high, card delinquencies are slowing as well. Both of these trends are quite good news for the fiscal health of the U.S. consumer.

Balances At An Eight-Year Low

The average balance for bank-issued credit cards declined to $4,951, a 4.1% decrease compared to the prior quarter. The balance is also 13.4% lower than Q2 2009. Last quarter marked the first with an average balance below $5,000 since the first quarter of 2002.

It's pretty clear that Americans are aggressively reducing their credit card debt. This sounds great from a fiscal responsibility standpoint. Of course, it also means that that they could be spending this money to stimulate the economy instead of paying down their debt. So while the trend is great for the long-term, it makes the recovery a little more difficult in the short-term.



The highest state average credit card debt remained in Alaska at $7,148, followed by Tennessee at $5,654 and Hawaii at $5,594.
The lowest average credit card debt was found in Iowa ($3,792), followed by North Dakota ($4,097) and West Virginia ($4,104).
On a year-over-year basis, national credit card originations dropped almost 6.5 percent

http://www.theatlantic.com/business/archive/2010/08/credit-card-performance-improves/62063/

[??????????]

People are getting their credit limits wiped out. The one card I have went from 2k to 300 dollars in one month.

[Beet]

People are getting their credit limits wiped out. The one card I have went from 2k to 300 dollars in one month.

Well, the credit card companies are becoming more responsible, and forcing consumers to do the same. It's a good thing. The past 10 or 15 years or so, the economy became too reliant on consumer spending, and credit card companies too reliant on irresponsible people who paid late and racked up huge debts.

[??????????]

Amen brother.

[opebo]

...The past 10 or 15 years or so, the economy became too reliant on consumer spending,...

Actually no, the economy has been reliant on consumer spending for generations - what changed was that which underpinned it (redistributive 'over-market' wages) was eliminated.  If we just start putting people to 'work' for $35/hour like we used to, they'll spend, demand will be sufficient, and credit will be a non-issue.