A Temporary Pullback in Credit Card Debt
Here's some interesting, and somewhat positive, data I recently came across.
According to TransUnion, one of the three major credit reporting bureaus, average credit card debt has declined for the first time since early 2007. Nationwide, the average debt per credit card borrower dropped 1.25 percent to $1,673 in the first quarter of this year from $1,694 in the previous quarter.
In the District, the average borrower had $1,884.79 in credit card debt in the first quarter, down from $1,971.25 in the last quarter of 2007.
The same trend held true for some Virginia and Maryland suburbs.
In Fairfax, for example, average credit card debt was $1,848.33 in the first quarter, down from $1,898.87 the quarter before.
Why the sudden pullback?
"It's probably a combination of things," said Jeff Morrison, manager of research and econometrics at TransUnion, in an interview this week. "A combination of consumer confidence and consumers looking ahead, and looking at gas prices. And they're pulling back on expenditures and catching up on what they have spent on."
But this may just be a temporary blip. Morrison said he expects the average debt to edge back up as increases in gas prices become more of a financial burden on borrowers.
"We see there's a good possibility that credit card debt will continue down next quarter and then tick up over time," he said.
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