Cardholders continued to pay what they woe despite the economic recession and the amount consumers need to pay on credit cards has come down to an all time low in over eight years. The year`s second quarter showed the figures to be promising despite the odds stacked against consumers.
The combined debt on an average of credit cards issued by banks with a Visa logo or Master card dropped by over 13%. Over the three month period it dropped from $5719 to $4953 from a year ago according to the agency Trans Union which has been keeping records.
Trans Union figures indicate that since the first quarter of 2002 this is the first quarter in which debt on credit cards dropped to under $5000.
The highest debt remained for Alaska which was at 7% and then dipped down. Debt over the national average was found to be recorded in twenty two states.
Alabama residents dropped their balance by 27% and paid off the most debt and dropped to $4753.
Payments were made on time by more number of borrowers and the second quarter also saw cardholders get past 90 days due after it dropped from 1.17 in the previous year to 0.92%.
The delinquency rate has never dropped to below 1% after the second quarter of 2007 before the economic depression happened. The rate tends to fluctuate but the improvement in the figures are showing that consumers are doing all they can to work on their credit card debt and make sure they are in the good books of creditors.
The fact that cashing in on home equity is difficult due to the housing market going down along with other factors such as lack of enough employment opportunities makes it evident that people are taking their credit card dues very seriously.
The highest delinquency has been seen to be in the state of Nevada after which Florida, Arizona and California are on the list. The national average for delinquencies was worse for a total of 16 states in all. The fact that more people were willing to work on the debts has been quite encouraging to the banks and to consumers.
It seems that the fact that there have been more number of foreclosures has also led to the crisis leading to people making their credit card payments on time. When people neglect their mortgage it gives them more money at hand for other expenses.