Consumers paid off most credit card debt since March 2009

It seems more consumers have been able to reduce their credit card debt recently, as charge offs dropped from June to July.

According to a new report from Standard and Poor’s Ratings Services, the final numbers related to charge offs – the amount of accounts lenders write off as irretrievable – for the month of July dropped a full percentage point from June’s 9.7 percent to 8.7 percent. This was the first time since March 2009 that S&P found the rate of seriously delinquent credit card debt slipped below 9 percent.

“Contributing to the declines, in our view, are reduced spending and more saving by consumers, along with the increasing difficulty and expense for borrowers to get and maintain credit,” Kelly Luo, a credit analyst at Standard & Poor’s, said.

The report noted that outstanding credit card debt owed to the lenders S&P tracks dropped 1 percent from June to $341.9 billion. That represents a drop of 17.1 percent from the July 2009 total.

Often, consumer credit is tied to unemployment figures, and the continued high rates of joblessness may be contributing to the drops in credit card debt as consumers can no longer qualify to borrow.