Average household debt falls to pre-recession levels
New reports indicate that households in Georgia and throughout the country have cut their debt down to record low levels. The average debt load held by U.S. households is now at or below the amounts reported before the economic recession hit in 2008.
The data also pointed out something that we have covered extensively on our Atlanta bankruptcy blog. Overall, liabilities such as credit card and home mortgage debt fell. In fact, the number of credit cards in circulation fell from 600 million in 2008 to 470 million today. However, the amount of outstanding student loans held by people in Georgia and around the country increased significantly. This indicates that federal authorities may need to take action on student loans in order to truly relieve many Americans’ debt load.
According to one bank executive, the new findings represent the lessons learned by Americans who have struggled to make ends meet during and beyond the economic recession. “It’s sort of a new reality that you have,” he said. “We’re going to try to live within our means because living beyond it didn’t work out.”
Experts are not yet sure whether the overall reduction in debt and the accompanying positive feelings will affect the economy as a whole, and many worry that consumers will continue to cut spending in order to maintain low debt loads. That will most likely be made clear during the upcoming holiday shopping season, when consumers will indicate whether they are willing to buy more and, in doing so, take on more debt.
Source: Deseret News, “Cutting back: Household debt falls to pre-recession heights,” Sean Parker, Oct. 15, 2012
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