In Hawaii, and on the mainland, credit card debt is declining - Hawaii News Now - KGMB and KHNL

In Hawaii, and on the mainland, credit card debt is declining

By Howard Dicus - bio | email

HONOLULU (HawaiiNewsNow) - Modest improvement in the economy, both in Hawaii and on the mainland, looks a little better in light of two reports showing that it's happening while Americans are paying down their credit card debt.

Moody's Investors Service says the national credit card delinquency rate fell below 5% in July for the first time in 20 months.

Credit card companies also wrote off a smaller amount of really overdue bills in July, Moody's said Wednesday, predicting that charge-offs have now peaked and will fall for the rest of the year.

TransUnion reported Tuesday that the second quarter - April, May and June - saw average Visa and MasterCard debt fall below $5,000 for the first time since the spring quarter of 2002.

Some states still have higher average bank credit card debt than that, and Hawaii is one of them. The Hawaii figure, $5,594, is third highest in the nation after Alaska and Tennessee. Iowa, the lowest, has less than $4,000 average credit card debt.

The delinquency rate for Hawaii was 5.71%. California was 10.45%, Arizona 10.59% and Nevada 15.86%.

That refers to any delinquency beyond 30 days. Delinquency beyond 90 days, the stage at which the credit card company starts to figure it may fail to collect altogether, is now below 1%.

More than two thirds of all American economic activity is consumer spending, which depends more on consumer confidence and consumer caution than on any specific wage or stimulus factor, and the slow recovery of the economy is more heartening when one considers that it is taking place while consumers are also reducing their debt.

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