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Amount of defaulted balances drops, while debt consolidation could help others in trouble
By Marvin Milner on Jul 24th, 2010
Consumers seem to be improving on the ability to pay off debt, according to a June report from two firms.
The Consumer Credit Default Indices, which are produced by Experian and Standard & Poor's, show that of overall balances, defaults accounted for 3.44 percent of loans. That is a 36.96 percent improvement from the same time last year.
Regarding specific types of credit, bank card defaults dropped from 8.9 to 8.8 percent from May to June. Balances accounted for by bad mortgages also dropped in that time.
"The consumer credit picture shows encouraging progress as default rates continue to fall across major categories and in the highlighted cities," said David Blitzer, chairman of S&P's Index Committee and a managing director at the firm.
Some of the cities that have seen improvements include New York, Miami, Chicago and Los Angeles. However, many consumers are still having difficulty trying to pay down credit card debt, which could lead to them looking for help.
One form that aid may take is debt consolidation, which can lead to lower interest rates on what is owed on credit cards.
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