23rd
Nov
2009

Credit Cards Schmedit Schmards.

Posted by Admin

It is the first time in over a decade that the credit card delinquency rate has fallen according to a new report. It seems counter-intuitive that in the middle of a recession would be the first time consumers were paying down their credit card debt. A drop from 1.17% to 1.1% is the largest, and indeed only, decline that has occurred in quarterly reporting since 1999.

The part that was truly shocking to me was that this survey was conducted by randomly sampling over 27 million credit card files, which is only 10% of the population that has credit card debt. While Alaska had the highest raw number of debt per person, $7699, Nevada had the nation’s largest rate of delinquency, at nearly 2%.

This sort of heavy downshifting in debt signals that consumers know that credit card debt is not good to have in a depressed economy, and that there is no reason they should be paying interest on money they owe–it is a waste.