After the recession, many consumers recognized the consequences of taking on more credit card debt than they could handle. This awareness may have led a number of individuals to take efforts to spend less on these accounts and drastically reduce their outstanding debts, according to a report from the Mantiowoc, Wisconsin, newspaper the Herald Times Reporter. Consumers successfully cut their outstanding credit card debt by more than $13 billion in 2010.
Some experts also believe the Credit Card Accountability, Responsibility and Disclosure Act may have helped borrowers realize just how much carrying a balance from one month to the next was costing them, the report said. However, previous defaults may have made it more difficult for those who had money problems in the past to obtain new lines of credit.
“I think people are learning the possible pitfalls of using too much credit, but I also think credit card issuers are getting smarter about issuing credit cards,” Brian Jacobsen, an associate professor of economics for Wisconsin Lutheran College in Milwaukee, told the newspaper. “In the debate over the credit crisis, a lot of people tend to point fingers solely on the side of the market.”
Despite the overall declines, consumers also saw the national total for credit card debt rise from one month to the next for the first time in nearly two years, in December.