Credit Card Debt Declines in January
For the first time in five months, consumers are carrying less credit card debt.
The latest monthly report from the Federal Reserve released last week shows that revolving credit, which is made up primarily of credit card debt, decreased at an annual rate of 4.4 percent in January. It declined nearly $3 billion to $800.9 billion.
The noticeable increases in credit card debt during the holidays had been a concern that consumers were again falling into the trap of spending more than they could afford. Credit card debt increased at an annual rate of 8.4 percent in November and 4.1 percent in December.
Consumers did a good job of paying down their holiday debt in January. Hopefully, cardholders are recognizing the significant cost of carrying credit card debt from one month to the next due to the very high interest rates.