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Consumer debt declines, but families continue to struggle

Grasping the concept of the total level of American consumer debt can be hard for Tennessee residents to fathom. The numbers are so large that drops in the national consumer debt may not seem to be overly significant or relevant. One reason this may be difficult for many to understand is because the national picture tells us very little about any one individual and their financial status.

According to a recent study issued by CardHub, consumer credit card debt dropped more than 5.2 percent in the United States during the first quarter of 2012 alone. What is more, this is not the first time this has occurred. In fact, according to the recent report, this is actually the third consecutive first-quarter drop in U.S. consumer credit card debt.

A five percent drop in consumer credit card debt sounds significant; especially considering it represents a drop over the course of only one quarter decline and it is the third consecutive decline in debt of its kind. The total level of American credit card debt, however, is still more than $800 billion, which is higher than it was this time last year.

The drop in credit card debt equates to a total consumer repayment of $35.8 billion. According to CardHub, this is 12 percent higher than what consumers repaid in 2011 and 8 percent less than in 2010. Some observers suggest that this puts U.S. consumers in a position similar to last year. Overall, consumers incurred $53.4 billion in new credit card debt in 2011.

Credit card debt is a serious problem in the United States. Too often, outstanding debt can leave consumers unable to meet the daily financial needs of their families. Outstanding debt can also be emotionally plaguing, causing turmoil and strife within the family dynamic. Finding ways to relieve consumer debt is essential to a happy and healthy household.

Source: Deseret News, "U.S. credit card debt dropped 5.2 percent in the first quarter of 2012," Joey Ferguson, June 8, 2012

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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