Credit card users: Not so responsible after all?

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By CANDICE CHOI, AP Personal Finance Writer

Summary

Federal Reserve data shows that the bulk of last year's drop in credit card debt probably came because banks had to write off loans consumers failed to pay for more than 180 days.

Story Published: Mar 11, 2010 at 9:30 AM PST

Story Updated: Mar 11, 2010 at 9:30 AM PST

Credit card users: Not so responsible after all?
NEW YORK (AP) - With unemployment high and personal wealth diminished, how did consumers pay down so much credit card debt last year? It turns out they may not have.

Consumer credit research site CardHub.com analyzed Federal Reserve data and found that the bulk of last year's drop in credit card debt probably came because banks had to write off loans consumers failed to pay for more than 180 days. CardHub released its report Wednesday.

The study found that the $83.27 billion in credit card debt that banks wrote off in 2009 accounts for the bulk of the of $93.2 billion drop in consumer card balances.

CardHub CEO and founder Odysseas Papadimitriou said it didn't add up that consumers cut their debt so much while under such financial pressures.


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