Consumer debt average falls in 2011 – An insight into the phenomenon

2011 was a good year for consumer debts. Consumers on average reduced their credit card debt by 11% last year. In 2011, the average credit card balance was $6,576, while the average credit card debt balance from 2010 was $7,404, according to CreditKarma.com. These results were based on data taken from 300,000 consumers. The main reason for the decline is weak consumer confidence, people were choosing to pay with cash rather than risk further debt.

Along with this, banks continued to tighten their lending limits and reduce the amount of credit available on credit cards for many existing customers.

In 2010 the amount of debt consumers owed eased after slipping by 7% during that year. However, it is being anticipated that this positive trend might not last very long. The economy is looking to rebound, and as a result debt is likely to increase as well according to experts. The major impetus behind this will be the loosening of credit requirements. According to Ken Lin, the CEO of CreditKarma, America is currently at the bottom of the debt trend.

Here is a look at the debt situations in some U.S. states:
  • Wisconsin consumers had the lowest average credit card debt ($5,062) in 2011.
  • Mississippi and Alabama recorded the largest balance declines - residents in those states reduced their balances by 23% and 16% respectively.
  • Alaska had the biggest average consumer debt ($7,937) - closely followed by New Hampshire and Connecticut.
Some trivia about debt in America:
  • The national average for mortgage debt remained steady at $173,876.
  • The most mortgage debt was carried by Californians ($313,749 per person).
  • West Virginia had the lowest average mortgage debt at $104,279.
  • Mortgage debt rose 12% in South Dakota and dropped 6% in Nevada.
  • The only debt type that increased was auto loan debt. That rose by 2% to an average of $15,504. The biggest rise was seen in Alabama, where auto debt rose by 30% to an average of $20,996.

About the author:

Rick Murphy is a contributory writer associated with the Debt Consolidation Care Community and has written several articles for various financial websites. He holds his expertise in the Debt industry and has made significant contribution through his various articles. To get debt related help visit: debtconsolidationcare.com/debt-settlement.html

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2 comments:

January 30, 2012 at 2:59 PM DD said...

Americans deserve a lot of credit for the discipline and persistence they've showed in reducing debt following the Lehman collapse. And they're still very much at it. The latest figures we have show that credit card delinquencies in the U.S. are at an all-time low - only 2.91% of all open accounts are past due by 30 days or more. Charge-offs have also fallen greatly from the post-crisis highs and will keep falling at least through 2012 and possibly through part of 2013. Read this for a more detailed analysis: http://blog.unibulmerchantservices.com/late-payments-on-credit-cards-hit-an-all-time-low-in-the-u-s. So let me repeat what I said: Americans have been doing a great job of deleveraging (not that it says much, but we are certainly doing much better than the Europeans) and deserve a lot of credit for it.

February 6, 2012 at 12:50 PM Mark S. Hankins said...

Perhaps charge offs are down. That doesn't mean they don't still meet or exceed the amount by which total consumer debt is dropping. And of course charge offs necessarily reduce the total amount of consumer debt that is measured in the statistic. Meanwhile, the only areas of consumer debt that are growing are auto loans (mainly government backed GM subprime) and government backed student loans.

If you're having trouble with your debt you need my book "Debt Hope: Down and Dirty Survival Strategies."

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