Photo: Orin Zebest via Flickr
Consumer credit card debt is on the decline as indicated by the data in a recent mid-year U.S. Credit Score Climate Report compiled by a leading consumer credit advocate.Nationwide, the average amount of debt a consumer carries is now $6,472, having decreased 10% during the first six months of 2011, and 17% since June 2010.
Card issuers are taking notice of this focused effort by individuals to handle their debt and are rewarding them accordingly.
Many lenders are easing up on their underwriting standards, nudging up the limits of individual credit lines and sending out millions of appealing credit card offers boasting perks like a free balance transfers, cash-back bonus rewards and travel incentives such as airline miles and V.I.P upgrades at airports and hotels. There are a plethora of new Visa credit card offers available that are loaded with perks being offered by some of the nation’s largest banks, including Chase, Capital One and Bank of America. MasterCard and American Express are following suit.
There were a dozen states that stood out in the report for declines in credit card debt larger than the national average. Showing an 11% drop in debt were California, Texas, and Massachusetts; in Illinois, Missouri and Minnesota there was a 12% drop; New York, Alabama and West Virginia dropped 13%; Wisconsin and Hawaii showed a 14% drop, and New Hampshire residents can boast the biggest drop in debt at 17%.
At the high end of the scale, the three states whose residents currently carry the highest average amount of personal debt are Connecticut with $7,479, New Jersey with $7,531 and Colorado with $7,543.
Some other interesting findings were that Minnesota, Wisconsin and Oregon are the states with the least amount of auto loan debt, while Texas, Louisiana and Oklahoma have the most debt attributed to automobile loans. Mortgage debt declined the most in Nevada since January, shrinking overall by 5%. In Iowa however, mortgage debt showed an increase of 3%.
The average credit score also remained constant since the start of the year, and fell just two points since last June to 667. “Economists are optimistic about the second half of 2011 as gas prices continue to drop and home costs level off. The data supports this trend, reflected by stable credit scores this year and consumers reducing their credit card debt,” announced Kevin Lin, the CEO of the consumer credit advocate site that published the report.