National Capital Also Leads in Credit Card Debt

Residents in Washington, D.C. have an overall credit card debt than the national average, according to a recent report from TransUnion, a major credit reporting bureau. However, D.C. residents are also better about paying their credit card bills on time as the delinquency rate is lower in the city.

In the fourth quarter of 2009, 1.21 percent of credit card holders were delinquent by at least 90 days on their credit card payments. However, in D.C. and Baltimore, the rate was about 1.07 percent for delinquent payments. That figure is just a little better than it was around the fourth quarter of 2008. As another bonus, none of the states showed an increase in credit card debt during the last quarter of 2009.

Across the nation, the average credit card debt during the fourth quarter of 2009 was about $5,434. That figure is about 5.15 percent lower than it was at the end of 2008. In the D.C.-Baltimore area, the credit card debt among residents fell by more than seven percent from $6,147 to $5,707.

One of the main reasons for the drop in credit card debt during the last quarter of 2009 is due to the fact that people are more conscientious about paying down their debts as a result of the financial problems. When people are uncertain of their financial futures, they want to have a “cushion” to fall back on in case they need extra money for bills, groceries or other necessities. Since many people are faced with those realities today, they are taking a more proactive approach with their finances and trying to solve problems before they become an even bigger issue.

As far as other states go, Nevada had the highest delinquency rate when it comes to credit cards with a two percent rate. Florida and Arizona were the next highest rates of delinquent payments while South Dakota, North Dakota and Alaska had the lowest rates in the nation.

According to TransUnion, if this trend continues, we could see the delinquency rate drop as low as 1.2 percent by the end of 2010.

On a less positive note, the number of charge offs during the first month of 2010 increased by as much as 0.83 percent up to 11.15 percent overall. Analysts think this rate could reach 12 percent in the next few months due to the unemployment problem and other financial issues facing our society today.

What are you doing about your credit card payments? Have they fallen by the wayside or are you trying to keep them up in case you need some extra credit in the future? Desperate times call for desperate measures and people are certainly feeling the pinch and finding creative and unorthodox ways to deal with the problem.