The Results Are In!

Posted on January 30 2012

According to www.creditkarma.com, Americans reduced their average credit card debt, maintained the same level of mortgage debt, and actually increased vehicle debt in 2011.  Americans held an average of $6,576 in credit card debt last year – down from $7,404 the year before.  Mortgage debt remained about the same at an average of $173,876.  Auto debt was up 2% from last year to an average of $15,504.  What can we take from these figures?

The good news finally comes from the credit card debt front.  Average credit card debt going down, to me, says that Americans made a collectively assertive effort last year to make significant progress in paying down those pesky credit card balances.  With a struggling economy, that trend is to be expected.  Now, as we see more and more signs that the economy is improving, we may start to see credit card debt start to increase again as people regain their confidence in the American economy.  Again, my challenge to you this year would be to ignore that trend no matter what the economic future holds.  Learn from past experiences when it comes to credit card debt and implement a lifestyle that is free from credit cards.

The statistic that showed the average auto debt of $15,504 was rather alarming to me.  That amount of debt would normally constitute auto payments in the $300 to $400 per month range.  My wife and I just paid off our vehicle loan (of $158/month) this past summer and let me encourage you that life without car payments is such a relief.  Never again will we fall into the temptation that says it is normal to have a car payment.  The $158 that we have each month is a significant amount of money that should not have to be designated for a vehicle payment unless absolutely necessary.  The next time you dream of buying a different vehicle simply because you are tired of the one you have, imagine what even $158 could buy you in the fruit and vegetable aisle at the grocery store every month and be thankful for the car you have.

By Nathan Aakre, CPFC®

Certified Credit Counselor

Ellis, Blake (Money.CNN.com).  “Credit Card Debt Drops 11%”.  CNN Money. Money.CNN.com, 17 Jan. 2012.  Web.  17 Jan. 2012.