Credit Card Repayments Drop Slightly in 2011

Credit Card Repayments Drop Slightly in 2011

A New Horizon Credit Counseling 1-800-556-1548

Fort Lauderdale (PRWEB) January 30, 2012

As reported earlier by A New Horizon Credit Counseling Services, credit card usage by consumers has seen an increase in 2011 and is poised to continue to rise for 2012, but the non- profit agency that assists consumers in repaying their debt through a combination of budgeting, credit counseling, financial education and a structured debt management plan notes that repayment of the new revolving credit balances is slipping. A New Horizon Credit Counseling Services is a nonprofit credit counseling organization that has been helping consumers since 1978.

According to First Data, which processes credit card transactions for more than four million merchants, credit card purchases increased to 8.2%, 9% and 10.6% respectively in the first, second and third quarter of 2011 respectively.

However, Steven Stark, COO for A New Horizon Credit Counseling said, “In November, revolving credit, the balance consumers maintain on their credit cards after making their payments, has risen surprisingly, which can only mean that debtors are not paying their debt as quickly as they did after the recent financial crisis”.

Moody’s Investors Service reported that the three-month average repayment rate of 21.7% in August 2011 was at a 12-year high, but that rate has since fallen to 20.9% in November and, at a .8% reduction, was the steepest second-half drop since 2007.

Stark said. “When you consider this in combination with recent Federal Reserve data indicating a seasonally adjusted annual 8.5% jump in credit card debt in November, the fastest pace since 2008, it raises concern, which we pass along to, not only to our clients, but to the public during our community financial literacy outreach events.”

Repayment rates are still well above those that consumers made during the mortgage boom days, when it was a common practise to borrow on the equity in the family home to repay for credit card purchases. The six largest credit card issuers have each reported higher repayment rates for the last three years. This is encouraging because it reflects that many consumers are still concerned astir the fragile economy and continue to work hard at reducing their debt.

For more information about their programs, contact 1-800-556-1548. They tinned also be found on the web at http://www.anewhorizon.org, or reached via email at csmanager(at)anewhorizon(dot)org

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