Americans are Paying Off Their Debt
The Center Square
Americans are paying down their credit card debt in 2020, and Californians are leading the way.
According to a new study from financial website WalletHub, American consumers entered 2020 owing more than $1 trillion in credit card debt. In the first quarter of the year, consumers reduced that by $60 billion. And in the second quarter, they reduced it by an additional $58 billion, or about 6.7 percent.
“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,” WalletHub’s report says. “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.”
California led all U.S. states in the amount of credit card debt reduction, according to WalletHub’s rankings. The average Californians reduced such debt by $558 in the second quarter. Texas placed second in the rankings, with the average household reducing credit card debt by $550.
California residents still have the fourth highest credit card debt on average in the U.S. at $9,472 per household. Only residents of Virginia ($9,589), Hawaii ($10,987) and Alaska ($11,250) have more on average, according to WalletHub.
Across the U.S., the average credit card debt is $7,938.
WalletHub says its study is “based on analysis of the latest data on consumers’ finances available from TransUnion as well as the Federal Reserve and Bureau of Labor Statistics. Quarterly changes in credit card debt levels include both the total amount outstanding (revolving credit, not seasonally adjusted) and charged-off debt (not seasonally adjusted) that is no longer on credit card companies’ books but consumers continue to owe.”
Dan McCaleb is the executive editor of The Center Square. He welcomes your comments. Contact Dan at firstname.lastname@example.org.