The amount of credit card debt being carried nationwide rose very slightly in August, despite the fact that some of the areas hit hardest by the recent recession continued to slash their balances.
The total combined credit card debt for every borrower in the country climbed 0.2 percent on an annual basis in August to $585.3 billion, according to the latest data from the credit reporting agency Equifax. However, the uptick came mostly because of relatively large increases in areas that already carried massive amounts of credit card debt, and despite declines in many areas that were most deeply affected by the recent economic downturn.
For instance, balances in much of Southern California, the Las Vegas area, and a few large cities in Michigan came down appreciably on a year-over-year basis, the report said. The Las Vegas area, where balances dipped 1.88 percent to slightly more than $3.69 billion, from more than $3.76 billion, led this trend. Further, the areas around Detroit, Ann Arbor and Flint saw balances slide 1.8 percent to nearly $9.79 billion, while debts in Los Angeles, Riverside and Orange counties in California slipped 1.7 percent to more than $34.24 billion.
By contrast, there was a notable surge in credit card debt owed by those in New York City, Long Island, and Northern New Jersey of 0.45 percent annually, the report said. Now, those consumers owe more than $49.66 billion, up from slightly more than $49.44 billion in August 2011.
“The differences between the metro areas illustrate the uneven nature of the economic recovery,” said Equifax Personal Solutions unit president Trey Loughran. “In places where the housing bust was the worst, such as Florida, California and Nevada, and in places like Detroit and Ohio where the recession was particularly deep because of a dependence on manufacturing, consumers are continuing to be prudent about using credit. In other pockets of the country, consumers are feeling a bit more confident to take on new debt.”
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Many consumers made significant cuts to their credit card debt appreciably during and immediately following the recent recession, but those efforts have leveled off in recent months. Experts say this may be the result of credit card borrowing hitting bottom, as borrowers simply cannot cut the amount they owe more than that. Because of this, it’s likely that borrowing will only increase or hold steady for the foreseeable future.
Image: Eli Duke, via Flickr