Have Americans Learned Their Lesson With Credit Cards?
The Great Recession drastically impacted personal finances of many households. During the credit meltdown, family budgets were reduced and deleveraging became a top priority. The recession technically ended in the summer of 2009, but Americans are still showing some financial restraint as they continue to slow their addiction to credit cards.
Consumers are not returning to their plastic-charging ways as fast as originally thought. In the third-quarter, Americans added $11.9 billion of credit card debt, down 30 percent from the $16.9 billion increase in the prior quarter, according to the latest report from CardHub.com. Compared to the third-quarter of 2012, the net amount of credit card debt added was down 8 percent.
In six out of the past seven quarters, consumer credit card debt figures have improved relative to the year before. Furthermore, the 3.19 percent credit card charge-off rate is at its lowest point since the first quarter of 2006. Other than that single quarter, there are now fewer charge-offs than at any point since the beginning of 1995. However, the total debt load has continued to increase and the average household owes more than they did in the prior quarter.