Consumer credit card debt down again on clarkhoward.com

CLARKONOMICS: Sometimes you have to go back in history to get context on a new development.

For example, before last night, you'd need to go back to the 1970s to find a time when the New England Patriots lost a playoff game at home. Likewise, when was the last time as many points were scored in a playoff game as during the Arizona Cardinals-Green Bay Packers battle?

In a similar way, consumers have set their own astonishing record with their recent level of debt reduction. Dow Jones reports that credit card debt in November was down by the greatest amount ever since records started being kept in 1943.

We are getting healthy piece by piece as people decide they don't want to live a debt-based existence anymore.

If you go back a little over a generation ago, we borrowed around 60 cents on every dollar relative to our income. Yet a little more than two years ago, at the peak of our modern financial madness, we were borrowing up to 136 percent of annual income.

The latest figures look like we're down to between $1.24 and $1.26 of borrowing on every dollar we earn. It's not where we should be, but it's definitely along the right lines.

The powers that be in Washington hope you don't reduce your debt because it hampers short-term economic recovery if people aren't spending.

But for the long term, reducing debt is the best thing you can do for the health of your wallet and our nation.

What others are saying

Govt Debt
The govt wants us to behave financially like they do (deficit spend) but fortunately many people are becoming more fiscally responsible. Maybe if we just do the opposite of what Uncle Sam does, we'd all be OK.
By Bill @ 01/18/10 03:41:24 PMreport abuse
I know I am
Clark, I know Washington must be hating on me right now, because two years ago I was looking at around $25,000 in credit card debt alone, but with a little bit of budgeting and some lifestyle adjustments we have paid off a little over 10,000. I'm pending a promotion at work which will net me about 8000 a more a year, and our plan is to live at our current budget and spend all of my promotion money on reducing debts since our standard of living is just fine where it's at. By the end of 2010 I'll have paid off one of my cars, a motorcycle, and be down with one credit card left around the $5,000 level with my credit cards.

@ Bob and all of the unemployed: If you are under 42, generally healthy, and at least have a GED, I know a wonderful job with a retirement package, full health care for your family, and is generally recession proof. It's called the US Military.
By Jeffrey @ 01/13/10 03:52:54 AMreport abuse
temporary phenomenon
Of those people who lived beyond their means (spent more than they earned), a small percentage, maybe 20% have been scared straight, somewhat semi-permanent.
But me believes that the vast majority of this crowd, is living within or below their means ONLY because they have no choice because the housing ATM,and other easy credit borrowing days are temporarily gone.
Mind you, those free-wheeling days will return. The average joe is financially illiterate, or worse and politicians are forever meddling in our financial system, merrily buying their way toward re-election and the lining of their own pockets.
Just my opinion though.
By brian @ 01/12/10 01:24:47 PMreport abuse
Debt
It never ceases to amaze me that people can't figure out that if they borrow more than they earn, they will NEVER pay it back. Maybe that's part of the problem, people don't think in terms of what the real cost is, but only in terms of what the monthly payment is.
By Bruce @ 01/12/10 01:08:10 PMreport abuse
Debt
"We are getting healthy piece by piece as people decide they don't want to live a debt-based existence anymore."

Yes. Trouble is, Washington has decided that debt-based existence is the greatest thing since sliced bread.
By D. B. Cooper @ 01/11/10 08:33:09 PMreport abuse
Credit debt
I can`t help but be curious about where the dollar figures on debt come from. Nobody asked me.
By Scott Es Va @ 01/11/10 07:55:59 PMreport abuse
NFL Games
I watched those 2 NFL games too Clark. Seeing as I am out of work and can't find a job mine as well.
By Bob Bummer @ 01/11/10 04:04:59 PMreport abuse

Govt Debt

The govt wants us to behave financially like they do (deficit spend) but fortunately many people are becoming more fiscally responsible. Maybe if we just do the opposite of what Uncle Sam does, we'd all be OK.

By Bill @ 01/18/10 03:41:24 PMreport abuse

I know I am

Clark, I know Washington must be hating on me right now, because two years ago I was looking at around $25,000 in credit card debt alone, but with a little bit of budgeting and some lifestyle adjustments we have paid off a little over 10,000. I'm pending a promotion at work which will net me about 8000 a more a year, and our plan is to live at our current budget and spend all of my promotion money on reducing debts since our standard of living is just fine where it's at. By the end of 2010 I'll have paid off one of my cars, a motorcycle, and be down with one credit card left around the $5,000 level with my credit cards.

@ Bob and all of the unemployed: If you are under 42, generally healthy, and at least have a GED, I know a wonderful job with a retirement package, full health care for your family, and is generally recession proof. It's called the US Military.

By Jeffrey @ 01/13/10 03:52:54 AMreport abuse

temporary phenomenon

Of those people who lived beyond their means (spent more than they earned), a small percentage, maybe 20% have been scared straight, somewhat semi-permanent.
But me believes that the vast majority of this crowd, is living within or below their means ONLY because they have no choice because the housing ATM,and other easy credit borrowing days are temporarily gone.
Mind you, those free-wheeling days will return. The average joe is financially illiterate, or worse and politicians are forever meddling in our financial system, merrily buying their way toward re-election and the lining of their own pockets.
Just my opinion though.

By brian @ 01/12/10 01:24:47 PMreport abuse

Debt

It never ceases to amaze me that people can't figure out that if they borrow more than they earn, they will NEVER pay it back. Maybe that's part of the problem, people don't think in terms of what the real cost is, but only in terms of what the monthly payment is.

By Bruce @ 01/12/10 01:08:10 PMreport abuse

"We are getting healthy piece by piece as people decide they don't want to live a debt-based existence anymore."

Yes. Trouble is, Washington has decided that debt-based existence is the greatest thing since sliced bread.

By D. B. Cooper @ 01/11/10 08:33:09 PMreport abuse

Credit debt

I can`t help but be curious about where the dollar figures on debt come from. Nobody asked me.

By Scott Es Va @ 01/11/10 07:55:59 PMreport abuse

NFL Games

I watched those 2 NFL games too Clark. Seeing as I am out of work and can't find a job mine as well.

By Bob Bummer @ 01/11/10 04:04:59 PMreport abuse

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Jan 11, 2010 -- Consumer credit card debt down again

What others are saying