January 14, 2010
-
News: Americans Continue Debt Struggle
A new report by Credit Karma indicates that consumers continue to struggle with high debt including credit card and mortgage debt. Overall, Americans are carrying an average of $185,000 in home mortgage debt. According to the report, between July and October 2009, Americans also increased credit card debt by 18 percent. States with some of the highest increases included Nevada, Oklahoma, Indiana, Michigan, Hawaii, and Pennsylvania. The highest increase in credit card debt was in the Philadelphia Metropolitan Statistical Area (MSA). Ken Lin, Chief Executive of Credit Karma attributed the increase in spending on the holiday season and expects Americans to return to prudent spending.
Overall, Americas are carrying an average of $8,079 in credit card debt; $53,744 in home equity loans; $14,899 in auto loans; and $26,692 in student loans. Credit scores fell on average two points and six points from early 2009. The national average credit score is 671. The only MSA to increase the average credit score was Los Angeles with a one point increase. Hit the hardest with the biggest credit score decrease was Boston where the average score dropped a whopping 15 points. Despite the large drop, Boston remains 21 points above the national average. Although consumers are expected to again tighten credit card spending during the early part of the year, Credit Karma says credit scores will most likely remain stable with little change.
Credit Karma releases the report which is compiled from the credit card and loan details of more than 87,000 of their clients' records. Current credit scores are compared with user's scores that were pulled at least 30 days before and not exceeding 90 days. Credit Karma is an online business based out of San Francisco, California. Although the company does not provide a copy of your credit report, they do provide free credit scores and tools to track credit scores.