Americans pay off their credit card debt each month ! NOT

This was posted at Credit Collections World.com on November 7, 2005



Individuals did not pay off debts last month like that they had hoped to, according to the Cambridge Consumer Credit Index, a monthly economic gauge that looks at consumer spending and debt.

The Index's "Reality Gap" fell five percentage points from October to 16 points. The "Reality Gap" measures the difference between the amount of debt consumers say they will pay off in the next month versus the amount of debt they actually did pay off a month later. A months ago, 83% of Americans planned to pay off debt, while a month later only 67% actually did so.

Chris Viale, president and chief executive of Cambridge Credit Counseling Corp says, "This month's index continues to show that many low-and-moderate income households are relying on credit to get by. As difficult as it may be, it is vital that consumers in this situation find ways to reduce not only their reliance on credit, but to also pay down their debts."

Viale believes that while some people may need to find a second job, others simply need to do better at sticking to a budget and controlling spending. Still others might need to consider credit counseling. "If they continue to treat credit as a source of income, eventually their debts will become overwhelming and affect their financial lives for a very long time," Viale says.

The Index is released on the fifth business day of every month to coincide with the Federal Reserve Board's G19 release of consumer credit outstanding data. The findings are the result of a monthly nationwide telephone poll of 800+ adults conducted by ICR/International Communications Research in the past week.