Average Credit Card Debt Per Borrower Reaches a 10-year low
A new TransUnion study shows that consumers made an estimated $72 billion more in payments on their credit cards than purchases between the first quarters of 2009 and 2010. Five years earlier, consumers made an estimated $2.1 billion more in purchases than payments. That is a big change in payment dynamics and TransUnion says this shows cardholders are paying down their balances and contradicts the belief that balances have declined primarily because of charge-offs.
In the first quarter of 2010, the average credit card debt per borrower was $4,679, a 10-year low. The average debt was $5,776 in the first quarter of 2009 and $5,165 in the first quarter of 2010.
TransUnion also shows that consumers prefer to pay with a debit card. In an IBOPE Zogby International survey that was commissioned by TransUnion in early June reports that approximately 55% of consumers said they chose to use their debit card over their credit card more than half the time when making daily purchases. 47% of respondents said they did so more than three out of four times. Another 8% of respondents said they chose to use their debit card over credit card 51-75% of the time.
Link to study