Study: Americans pay down debt, but still rack it up

Americans paid off credit card debt in the first quarter of this year, but only after accruing significant debt by the end of last year.

COLUMBUS – Ohioans join the rest of the country in paying off almost $35 billion in credit-card debt in the first quarter of this year, according to a study released this week by CardHub.

While the accomplishment may sound promising, CardHub spokeswoman Jill Gonzalez said it’s important to note that consumers accrued almost $46 billion in debt in the last quarter of 2014.

“We’re getting farther from the recession. A lot of people say we’re not all the way out of it yet, but I think consumers are now willing and wanting to spend more,” she said. “Unfortunately, they’re still spending money that they don’t necessarily have.”

To reduce credit-card debt, Gonzalez recommended paying off cards with the highest interest rates first, or transferring balances from those cards to low-interest cards. She said it’s also important not to fall behind on credit-card payments, since delinquency affects credit scores significantly.

Another method to manage spending is called the “island approach,” which involves using different credit cards for different types of transactions. For example, you could transfer existing debt to a zero-percent interest card, and use another card that offers ‘rewards points’ for ongoing spending. Overall, Gonzalez said, having a budget is key.

“Making a budget, sticking to it,” she said. “That’s kind of the age-old advice, but really just spending less than you have to begin with. And then the money that you are spending, make sure you’re setting it aside to pay off your debt.”

In addition to paying off debt, experts recommend building an emergency fund in case of job loss or an unexpected illness.

The study is online at

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