Americans have less credit card debt now than they did two years ago. The average credit card debt for Americans has dropped $2,000 from two years ago. Although some may interpret this data as a sign of an improving economy in Texas and elsewhere, analysts are claiming that the drop in credit card debt is actually a result of people's continued economic struggles nationwide in trying to obtain debt relief.
When a person files Chapter 7 bankruptcy, they will usually be able to discharge their credit card debts. This is because this type of debt is considered an unsecured loan. As such, the debt does not have any piece of property, such as real estate or a car, attached to it as collateral.
Average credit card debt per household has also decreased considerably in the last two years, according to these NerdWallet findings. The average indebted household had $14,517 in credit card debt in March 2012. This is a significant decrease from $16,383 for the same month in 2010. The average for all households fell from $7,219 to $6,772 during this same period.
Why is this not necessarily good news? Analysts say the decreases in credit card debt have been a result of credit card companies writing off large amounts of debt which they deemed to be uncollectible in 2010. Since 2006, the charge-off rate during this time increased by to 10.7 percent in 2010. That's a 300 percent increase.
After losing such large numbers of monthly payments, credit card companies in Texas and everywhere else in the nation also made it more difficult to obtain credit. Analysts say that caused the average credit card debt to continue to decrease nationwide, as well.
It's clear from this report that the need for debt relief remains significant. Fortunately, options for regaining solid personal financial footing do exist and individuals can explore them with the help of an experienced attorney.