Credit card Debt in the United States has been on a decline since early 2009 due largely to consumers’ reluctance to use credit cards amid the tough economy.
But some analysts say that the decrease in credit card Debt might be the result of the write-offs of Debt as losses by financial firms.
Consumers have been extra careful not to exceed credit limits and have turned to debit cards for their purchases, but how much they are reducing their Debt by themselves or how much banks are doing it for them is not that clear.
“There is a lot of debate going on right now among economists,” said Cristian de Ritis the director of credit analytics with Moody’s Analytics. “Is there truly de-leveraging or are charge-offs removing a lot of balances?”
The Federal Reserve reported earlier in the month that outstanding revolving accounts, which include credit card Debt, have dropped from $915 billion in the second quarter of 2009, to $832 billion in the second quarter of 2010.
