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Consumers respond to recession by paying credit card debt

Many consumers in South Carolina and around the United States have crushed their credit card debt as a response to the economic recession, according to a recent news report. Between the years of 2007 and 2010, families carrying debt on their credit cards has fallen substantially. The recession has caused a drastic decrease in many family incomes, prompting consumers to rid themselves of credit card debt.

The 2010 Survey of Consumer Finances reports that only 39.4 percent of families currently have one or more credit cards that are carrying a balance. This number has declined 6.7 percent since 2007. Credit card debt has decreased across the majority of demographic groups but some groups, such as those where the head of household is 75 or older, currently still rely on credit cards, especially after the recession hit.

The economic recession devastated many Americans' incomes, and median net worth throughout America fell a staggering 38.8 percent between the three years the study covered. The collapse is largely due to falling home values. Average incomes also fell for a majority of consumers with those holding higher education levels suffering the most loss.

There are several avenues for South Carolina residents who do not have the resources to pay their credit card debt off immediately. For many, filing for bankruptcy is a last resort decision, but it can help families who have found themselves in deep debt. Many people do not have the ability to manage their debt any longer, especially with the long-term effects of the recession and high unemployment levels. Bankruptcy may be a viable option for those people who wish to make a clean financial start.

Source: Fox News, "Fed Survey: Recession Shrank Card Debt, Crushed Household Wealth," Kelly Dilworth, June 13, 2012

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