Credit Karma Says Credit Card Debt Has Increased

A new report from CreditKarma.com of San Francisco says that credit card debt increased 18 percent nationally in Oct. 2009 from July. According to the website, the increase in debt may have been due to the high unemployment rate.

The Data

In addition to nationwide data, the website provided a few details on specific states with the highest increases in credit card debt. Here are a few:

• The Philadelphia Metro area, with a 40 percent increase in credit card debt since July, had the highest increase in the country.
• Other states like Michigan, Oklahoma, Pennsylvania, Tennessee and Indiana had increases in credit card debt of at least 30 percent.

The website also notes that because of these increases, many consumers were forced to turn in their credit cards toward the end of the year.

Debt Per Household

The website also noted the average consumer debt per household at the end of 2009. Here are a few stats:

• $8,079 – credit card debt
• $184,940 – home mortgage loans
• $53,744 – home equity loans
• $14,899 – auto loans
• $26,692 – student loans

According to the site, the numbers show that consumers will likely return to frugality in early 2010, which could indeed help their credit scores.

Discrepancy Between CreditKarma.com and Federal Reserve Numbers

A report released by the Federal Reserve in Dec. 2009 showed that revolving debt – which includes credit cards – had decreased in Oct. 2009 by $6.95 billion to $888.1 billion. One reason for the discrepancy is that CreditKarma.com relies on the credit scores of its user base with previous scores of the same base, which includes about 87,000 users.

On the other hand, the Fed is used a large sample and did not single out credit card debt.

The site also reported that with debt increasing for many, credit scores decreased in most regions in the second half of 2009. Nationwide, credit scores dropped two points since July and dropped six points since the beginning of 2009. However, the report shows that scores have remained stable since October.

How is your credit card debt?