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New Jersey bankruptcy: Credit card debt has dropped nationwide

It may be no surprise to anyone in New Jersey that prior to the recession, Americans were addicted to credit. Credit card debt was out of control for many people, which is, at least in part, illustrated by the dramatic jump in the amount of people filing for bankruptcy during the recession. As the country emerges from the recession, data is showing that Americans have the lowest level of credit card debt in many years.

Part of this is credited to the CARD Act passed in 2009. This act restricted credit card companies from many of their pre-recession practices. For instance, lenders must first assess whether an applicant has the capacity to pay before issuing him or her a credit card. Credit card companies were also limited in the amount of interest and fees they could legally charge consumers.

However, it wasn't just the Act that has driven down credit card debt. Consumers seem to be using more restraint regarding their use of credit cards. Balances are not as high as they used to be and more people are paying off their cards each month and/or avoiding delinquencies. These factors have caused changes in the market that many people believe are positive.

Even with these positive trends, there are still many people who are unable to pay their credit card bills through no fault of their own. Thousands of New Jersey residents may have resorted to using credit cards to pay for necessities during hard economic times. Those balances may now be out of control. Filing for bankruptcy could eliminate those balances and give consumers back control of their finances.

Source:, It's the most important change in the US economy since the Great Recession -- that nobody is talking about, Matt Phillips, Nov. 11, 2013

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