Sunday Monday cover on credit and the economy-- in West Jordan, Utah, May. 14, 2008.
Tom Smart, Deseret News
Outstanding credit card debt in the U.S. dropped 5.2 percent to $803 billion during the first quarter of 2012, marking the third consecutive first-quarter drop, according to a recent study from CardHub.com.
Though first quarter figures have dropped, the total debt is slightly greater than the $794.4 billion reported for the same time last year.
The $35.8 billion paid down in the first quarter is 12 percent higher than in 2011, but it’s 8 percent lower than 2010.
This may be a sign that the U.S. is on track to have a pace similar to 2011 in which Americans incurred about $53.4 billion in new credit card debt, according to Card Hub.
“It’s clear that most of us have yet to truly internalize the reality that we cannot continue spending in this reckless manner,” Odysseas Papadimitriou, chief executive officer of Card Hub, said in a statement. “The problem is that we see signs of the nation’s economy recovering and think we can return to pre-recession spending levels. Unfortunately, pre-recession spending was inextricably tied to the housing bubble, and without another one, we cannot turn back the clock."
The amount of debt banks charged off dropped about 37 percent to 8.8 percent from 2011 figures.
EMAIL: jferguson@desnews.com
TWITTER: @joeyferguson
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Joey Ferguson is a business reporter for the Deseret News who focuses on public finance. He joined Deseret News after graduating from Brigham Young University-Idaho with a bachelor's degree in journalism in May 2011. He more ..
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It's a good thing that people are paying down debts. The only unfortunately side effect of that though is that paying down debts means people aren't putting that money into the economy to fuel demand and it's demand that creates jobs More..
Part of the problem is saving rates. One percent is not going to entice anyone.
We need a return on our investment to save rather than spend.
Of course, the other side of that coin is loan rates. A 3.5% rate on mortgages is politically More..