Credit Card Debt Falls at Fastest Rate Since 1980

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Today, the Federal Reserve issued its quarterly report on household wealth in the U.S. While there has been a rather dramatic drop in the net worth of American households, there were some interesting silver linings in the report. The most encouraging was a look at the falling incidence of credit card debt. MarketWatch reports on the reduction in household debt:

Liabilities of households fell by $114 billion in the quarter, as consumers reduced their debts at an annual rate of 1.1%. Consumer credit card debt fell at a 3.5% annual rate, the largest decline since 1980.

Indeed, this news about credit card debt is rather encouraging. Consumers are starting to look at their financial habits and realizing that credit card debt is expensive. As Americans try to improve their financial wellbeing, credit cards are being used less, and debt is being paid off. Since the recession, consumers have shown the first recorded decline in credit card use since they became popular.

The real test, though, will be for the future. Can American consumers make a habit of responsible credit card use and debt reduction? Only time will tell.