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Bills.com: Consumer Debt Decreases 14.6% to $12,986 in First Half of 2012


July 24, 2012 - San Mateo, CA

Consumer money resource Bills.com today released its America's Debt Report for the first half of 2012. The report reflected larger economic trends, with overall improvement but persistent areas of concern such as credit card spending and the number of accounts in collection.

While overall debt among those seeking debt advice fell nearly 15% to an average of $12,986 and the size of many average debt balances declined, collection accounts and credit card debt continued to rise. At the same time, the report found that balances on three of the top five bank issued credit cards dropped while four of the top five retail issued cards remained the same or increased, signaling a potential shift away from bank issued credit and towards retail specific outlets.

Additional highlights from the report include:

  • Credit card debt remains the most common type of consumer debt at 53%;
  • The number of both student loans and home loans fell slightly, as did average loan balances;
  • The average home loan balance dropped significantly: -11% to $149,200;
  • The number and size of collections accounts continues to grow with 11% of consumers in collections and an 18% increase in average collection balances.

"We are seeing an overall improvement in the debt health of many consumers, and the cycle of consumer deleveraging appears to be continuing," said Brad Stroh, CEO and co-founder of Bills.com. "However, we hope that this broader shift is not masking some other, more troubling trends such as a willingness to allow accounts to go delinquent or take on additional credit from retailers. Rising student loan debt is also a concern. Banks and lenders are aggressively trying to acquire consumers and build their balance sheets, so consumers must remain 'money-wise.'"

Credit Card Debt Highlights

  • Nationally, average credit card debt grew 2% to $5,600, but peaked in the holiday debt period of January & February at $7,600;
  • Bank of America users maintain a significantly higher average balance than other bank issued cardholders at $10,000;
  • Discover entered the top five of bank issued credit card issuers for the first time;
  • Walmart exited the top five of retail issued card balances, making way for Kohls;
  • The average balance on a Target National Bank credit card rose 24% from the previous six months.

Types of Debt

The top five types of debt and average balances as reported to Debt Coach include:



----------------------------------------------------------------------------
Account Percentage of Users Average Balance Change in Balance
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Credit Card 53% $5,600 2%
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Student Loan 12% $10,600 -5%
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Collections Agency 11% $1,100 17%
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Auto Loan 7% $13,200 0
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Home Loan 5% $149,200 -11%
----------------------------------------------------------------------------

Top Bank Issued Card Balances

The top five bank issued credit card balances by number of accounts:

 ---------------------------------------------------------------------------- Account Percentage of Users Average Balance Change in Balance----------------------------------------------------------------------------Chase 10% $7,500 7%----------------------------------------------------------------------------Capital One 8% $2,900 -3%----------------------------------------------------------------------------Bank of America 7% $10,000 -7%----------------------------------------------------------------------------Discover Financial 4% $5,400 n/a Services----------------------------------------------------------------------------Citi 3% $7,800 -3%---------------------------------------------------------------------------- 

Top Retail Issued Card Balances

The top five retail issued credit card by number of accounts:

 ---------------------------------------------------------------------------- Account Percentage of Users Average Balance Change in Balance----------------------------------------------------------------------------Macy's 2% $940 1%----------------------------------------------------------------------------Sears 2% $3,400 0----------------------------------------------------------------------------Best Buy 1% $1,600 12%----------------------------------------------------------------------------Target National 1% $2,500 24% Bank----------------------------------------------------------------------------Kohls 1% $630 n/a---------------------------------------------------------------------------- 

Methodology

Every six months, Bills.com examines usage data from its Debt Coach tool to compile America's Debt Report. The resulting data highlights important statistics and trends concerning those Americans seeking debt advice and how they choose to eliminate their debt.

About Bills.com

Bills.com is the leading resource for free and personalized money help. Founded by a group of financial experts intent on helping consumers save time, money and stress, Bills.com is designed to give consumers confidence in making money decisions. The site offers useful information, powerful tools, and real money experts to give consumers the information they need in the way they want it.

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Michael Azzano
Cosmo PR
415/596-1978
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