Credit Card Debt at Lowest Levels in 8 Years

Credit Card Debt at Lowest Levels in 8 Years

Eileen AJ Connelly, AP Personal Finance Writer

NEW YORK (AP) — The amount consumers owed on their credit cards in this year's second quarter dropped to the lowest level in more than eight years as cardholders continued to pay off balances in the uncertain economy.

The average combined debt for bank-issued credit cards — like those with a MasterCard or Visa logo — fell to $4,951 in the three months ended June 30, down more than 13% from $5,719 in the same period a year ago, according to TransUnion.

The credit reporting agency said it was the first three-month period during which card debt fell below $5,000 since the first quarter of 2002.

Credit card debt remained the highest in Alaska, but slid 7% there to $7,148. A total of 22 states recorded debt higher than the national average.

Residents of Alabama paid off the most debt, dropping their average balance by 27% to $4,753.

More borrowers also made payments on time. The rate of cardholders past due by 90 days or more fell to 0.92% in the second quarter, from 1.17% last year.

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