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COVID-19: How Americans Reduced Personal Credit Card Debt By $83 Billion In 2020

Credit cards and money
Credit cards and money Photo Credit: Image by Circ OD from Pixabay

Many Americans have used downtime and stimulus payments from the fed to reduce their personal credit card debt.

Citizens paid off or otherwise got rid of $82.9 billion in credit card debt in 2020, according to WalletHub, which cited the Federal Reserve.

This is a huge reversal in the last 10 years of U.S. credit card trends. Typically, Americans added $54.2 billion to the national credit card debt per year.

Still, a lot of debt remains. U.S. consumers owe a collective $1 trillion to credit card companies, WalletHub said. The average household credit card debt is a little over $8,000 - which is 12 percent less than it was just one year prior.

Federal stimulus checks have been credited with relieving much of the debt either by paying down on the amount owed or saving unemployed or underemployed adults from having to make purchases on credit due to a lack of funds.

LOCAL METROS

A survey of major U.S. metros ranked which cities have paid down their debt the most. The city that had the highest personal credit card debt paydown was Oxnard, California, where individuals reduced their debt by $1,270 on average.

There were no major metros in Massachusetts where the average resident’s personal credit card debt decreased. However, the WalletHub study gave Worcester and Boston credit for having only small increases in debt.

In Worcester, the average credit card debt increased by $61. In Boston, the increase was $358.

There is only one U.S. metro where, in 2020, individuals added more than $950 to their accumulated debt. In Burlington, Vermont, the average credit card debt increased by $3,020 that year. 

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