May 1, 2014
A growing percentage of Americans are paying their credit card balances in full every month, according to a recent Gallup poll.
Of those who took part in the latest survey, 48 percent said they pay their balances off completely each month. This figure was the highest in the history of survey, which has been conducted regularly since 2001. In the prior rendition of the study, held in 2008, 43 percent of respondents noted this response.
The fraction that have a balance on their credit cards each month dropped to 33 percent, which was below the 35 percent who specified this particular behavior in 2008.
Americans holding fewer credit cards
Consumers are also holding fewer of these cards, as the average American participating in the poll has 2.6 credit cards compared to 2.9 six years ago, according to Moneynews.
The number of Americans reporting they do not hold a credit card was 29 percent, compared to 22 percent in 2008, the media outlet reported. Alternatively, 7 percent said they have seven or more cards, compared to 9 percent who specified this in 2008.
Balances have dropped
Consumers also owe less on their cards than they did the last time the poll was done. The average American had a balance of $2,426 in the most recent survey, compared to $2,941 in 2008. Those who hold these cards owe an average of $3,573. This figure is almost $399 less than the balances they had during the last poll.
Art Swift, Gallup's managing editor and author of the report, provided some perspective on the changing demographics.
"Americans are less reliant on credit cards than in the past. They are carrying less credit card debt overall, own fewer cards, and are more likely now to say they always or usually pay their full balances every month," he said in the report. "This suggests that credit cards - a staple of American consumer life for decades - might not be as vital a financial tool to individuals as they had been in the 1990s and 2000s, when Americans often used their credit cards to make ends meet."
If his prediction is accurate, and people are indeed moving away from using these cards, the development could curtail loan sales by impacting the supply of available debt.
Financial institutions that want to get involved with these transactions might consider contacting Garnet Capital Advisors, which has significant experience in this particular area.