Wall Street observers who’ve been worried that consumers’ inability to pay their credit cards will exacerbate the financial-services industry’s troubles can breathe a tiny sigh of relief. A study by credit reporting firm TransUnion shows that credit-card users are working hard to pay down their mountainous debt, and in the second quarter the average credit-card balance fell 13% from a year ago to levels not seen since 2002. Americans have also gotten better about paying their bills on time, as the percentage of people who’ve fallen behind in payments by more than three months dropped to 0.97% from 1.17%.
Alaskans remain the most indebted to credit card companies, with an average outstanding balance of $7,148, down 7% from last year. Alabamans have taken the most initiative in paying their bills, dropping their debt an impressive 27% to $4,753.
Consumers are still a long way away from debt freedom. The average credit-card debt level was still $4,951. But the TransUnion results at least indicate that credit-card users are, for the moment, weary of indebtedness in a highly uncertain job market and a fragile housing environment that continues to rob them of one of their principal sources of equity.
