WASHINGTON (6/10/15)--U.S. consumers paid down $34.7 billion in credit-card debt during the first quarter of 2015, according to CardHub. That figure is 7% larger than the amount paid down during the first quarter in the previous two years.
One reason may be that consumers began 2015 with more debt to repay, finishing 2014 with more than $57 billion in new debt and starting the year with the largest first-quarter average household credit card balance in six years--$7,177.
This makes seemingly encouraging improvements easier to come by and apparently more substantial than they really are, said CardHub CEO Odysseas Papadimitriou.
But rather than incurring less than $40 billion in new debt, they are more likely to replicate last year’s performance with a $55-plus billion buildup, CardHub said. The last time consumers paid off so much credit card debt in the first quarter was in 2012.
Consumers paid off roughly 4% of their overall debt load during the first quarter, and while the amount was higher than the past couple of years in dollar terms, the percentage reduction has been consistently around 4%.
Credit card defaults declined by more than $350 million in the first quarter compared with the same period in 2014, bringing the first quarter default rate to its lowest point since 1995.