• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Consumers pull back on credit payments

Posted on: Friday, 30 January 2009, 12:05 CST

U.S. consumers have pulled back on payments to credit card companies as they struggle to keep up with bills, a research firm said.

CardTrak.com, which tracks credit card data, said consumers in November paid 16.1 percent of their outstanding debt, a drop of 2.5 percent, which is the largest decline on record.

It's kind of shocking, CardTrak.com founder Robert McKinley told USA Today. It indicates that there are fundamental changes in the way that consumers view and use credit, he said.

Households that included at least one credit card owed owned an average of $10,728 in 2008, almost unchanged from the previous year, CardTrak.com said.

On average, consumers have historically paid about 18 percent of the balances on their credit cards each month, a figure often cited as a measure of consumer health, USA Today said.

The payment rate can drift down in recessionary times, but the (November's) near-collapse is mind boggling, McKinley said.

If what we have now continues through 2009, it could be the first year in 30 years that the industry loses money, he said.

Source: United Press International

More News in this Category