WASHINGTON–U.S. consumers continued to pay off their credit card debt during the first quarter of 2021, building on a record-setting performance in 2020, according to a new analysis from WalletHub.
However, although credit card debt levels are becoming more manageable nationwide, some areas of the U.S. have bigger payment problems than others, noted WalletHub, which compared more than 180 of the largest cities based on how much residents owe to credit card companies – specifically, how those balances changed in Q1.
“While 2020 was a year to forget in most respects, Americans excelled in terms of paying off credit card debt, getting rid of $82.1 billion in debt,” WalletHub stated in releasing the findings. “This is a major accomplishment, considering that consumers have added an average of $45.6 billion in credit card debt per year over the past 10 years.”
WalletHub added the country’s credit card debt problem is “far from solved, however,” as American still collectively owe nearly $900 billion to credit card companies, with the average household balance at $7,519.
“Both figures are also likely to rise as the economy reopens from the coronavirus pandemic,” said WalletHub. “As a result, WalletHub’s early projection for credit card debt in 2021 is that U.S. consumers will add roughly $60 billion to their total balance.”
Additional Findings
Other findings in the WalletHub analysis, which is based on the latest data available from TransUnion and the Federal Reserve, include:
- Consumers’ Q1 2021 credit card debt paydown was 51% larger than the post-Great Recession average for a first quarter
- Outstanding credit card debt decreased by 6.6% during Q1, compared to the previous quarter
- Since the end of the Great Recession, consumer performance has regressed on a year-over-year basis in 6 of every 10 quarters.
The full report can be found here.