Wednesday, September 23, 2020

Survey: American Consumers Post Record $60 Billion First-Quarter Credit Card Debt Pay Down

Americans started 2020 with more than $1 trillion in credit card debt after a $76.7 billion net increase last year, but a survey finds that during the first quarter of the year, consumers paid down a record $60 billion.

The personal finance website Wallethub reported on its survey:

Americans began 2020 owing more than $1 trillion in credit card debt after a $76.7 billion net increase during 2019. Consumers quickly changed course, however, posting the biggest first-quarter credit card debt paydown ever, at $60 billion. This was followed by another record in Q2, when consumers payed down $58 billion more in credit card debt. Although first quarter paydowns are normal, Q2 2020 marks the first time in more than 30 years that credit card debt has dropped from April through June.

As a result, WalletHub now projects that U.S. consumers will end the year with a slight reduction in credit card debt for the first time since the end of the Great Recession in 2009.

Outstanding credit card debt dropped by roughly 6.7% during Q2, compared to the previous quarter.

The survey also includes how each state stacks up for having the biggest paydowns and those with the smallest.

The top five states with the biggest paydowns are, in order, California, Texas, Florida, New York, and Illinois.

The five states with the smallest paydown, from 45th to 50th, are Alaska, South Dakota, North Dakota, Wyoming, and Vermont.

The survey found that the average credit card debt per household is $7,938, down from $8,645 per household in 2019.

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