As the economy slowly begins to right itself following a six year recession, more Americans are beginning to adopt smart spending and saving habits. In Michigan as elsewhere in the nation, credit card debt is beginning to shrink for individuals who have changed the way they think about their financial habits. For those who continue to labor under heavy debt loads, there are still options available to assist in getting back on the right track.
A recent report courtesy of the American Banker's Association has shown that, while credit card purchases are on the rise, ending balances actually fell approximately 5 percent. This does suggest an upturn in individuals using credit cards to purchase goods and services. However, it also means those individuals are being more mindful of their balances and ensuring they do not get out of control.
The national credit card APR hovers around 15 percent annually, a hefty interest rate for those carrying high balances. The recent trend toward individuals paying down balances may have something to do with the relatively high interest rate they face if their balances carry over. Using a credit card as a purchasing tool rather than a borrowing tool is a good way to help mitigate existing debt and keep from accruing more.
Of course, not everyone is in the position to pay off existing balances immediately, as Michigan residents can attest. For those individuals who suffer from a high volume of credit card debt, it may be helpful to seek out additional options. Debt counseling and restructuring, as well as bankruptcy protection, can help alleviate severe debt and put individuals on the right track for financial stability.
Source: bizjournals.com, "Credit card debt, interest payments continue shrinking", Mark Holan, April 2, 2014