A new report issued by the New York Federal Reserve indicates that U.S. consumers are gradually paying off their debt. The report indicates that consumer debt has steadily decreased for the past seven quarters and has dropped a full $992 billion from its highest point, Fox Business reports.
In September, credit card debts alone decreased by $8 million, representing the 25 consecutive months of decline for this common type of consumer debt.
Such data reportedly indicates that consumers are making progress in improving their bad credit history and boosting their credit scores. Reductions in overall balances and in utilization ratios – the percentage of one’s available credit that a consumer owes – are the simplest way to improve credit history. Consumers are reportedly avoiding large purchases as a reaction to the tightening of budgets in the wake of the financial crisis, and many are educating themselves about credit-related issues for the first time.
Credit card debt is still relatively high, as the average American household owes more than $15,700 in credit card debt. However, with delinquencies dropping, this figure may go down in the near future.