Average Credit Card Debt Statistics Show 15th Straight Month of Decline!

Average Credit Card Debt per consumer is dropping at an amazing rate, people are spending less due to the economy ...

Politicians can argue the point all they want, but the truth is, we are in a recession and there are no two ways about it. A sure indication that the economy is not all that it should be is the fact that the average credit card debt per consumer is dropping at an amazing rate for the 15th straight month. Whether it is because of fear that the economy is going to bottom our or whether unemployment is an issue, the point is, people are not spending money like they did in 2008. Just over a year has shown dramatic changes in economic trends.

There are so many figures flying around out there that it really is hard to determine if there is any validity to the statistics released by any one organization. Depending on which agency you listen to the figures can vary by as much as 100%. While there are statisticians who might argue this point, the best source appears to be the Federal Reserve Board. Their most recent G19 Report released Friday, February 5, 2010 shows that Americans discarded $8.5 billion in debt. This makes it a record setting 15 continuous month period of decline.

If you look at the statistics they released, the Feds state that the average household still has over $8,200 in credit card debt outstanding. However, that is based on the total national credit card debt divided by the number of households reported in the most recent census. Unfortunately, right there the statistics become problematic because according to recent surveys, approximately 25% of all households do not have a credit card.

While it would be nice to trust those figures because they were released by the Federal Government, it doesn’t take a rocket scientist to see the flaws in those calculations. Realistically then, based on the numbers of families who do have at least one credit card the figure would be closer to $10,200 per household.

Looking at it from an individual perspective, that latest G19 report stated that the average consumer owes $3154 if you don’t take into consideration the numbers of households that don’t have credit cards. But if you look at it realistically in terms of actual households who have credit cards that figure changes to $3942 in debt.

The important thing to understand is that those figures are just averages. Some consumers owe more than $10,000 in credit card debt while other consumers have a $0 balance because they pay their bills as they come in. Also, some of that decline is very probably due to the fact that a significant number of people are in default and are unable to use their plastic.

It would be nice to believe that Americans are wising up to the state of financial affairs, but for the most part, a large part of the decline is probably either due to default or cards being maxed out. Remember, if your card is at its limit you surely can’t spend against it. The figures released by the government don’t take into account the cards in default yet still open, and the cards maxed out and thus unusable.

In the final analysis, it doesn’t really matter if you can’t use your card or won’t use your card, the decline in the average credit card debt is indicative of a sorry state of financial affairs that doesn’t look like it will be changing for the better any time soon.