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Cardholders eradicate card debt

By Janna Herron · Bankrate.com
Tuesday, July 3, 2012
Posted: 12 pm ET

Even after two years of chipping away at debt, Americans haven't slowed in slashing their credit card balances.

Credit card holders paid down their outstanding balances at the fastest rate on record during May, according to the latest Fitch Ratings index released Tuesday. Adding to the good news, card delinquencies hit their lowest level in the index's 18-year history in June's reading, which measures credit card performance through the end of May.

And the bump-up in the percentage of card accounts deemed uncollectible in April was erased by a decline in May, the index showed.

Fitch's index that measures store credit card performance also revealed positive trends. Charge-offs are down and delinquencies are near record lows. The monthly payment rate is also close to historic highs.

That's good work, even if some economists say consumers' recent focus on debt reduction -- instead of consumption -- is hurting economic growth. I say, shoring up your finances by paying off credit card debt is best for you and your family.

The index tracks more than $112 billion of prime credit card asset-backed securities. It's comprised of card portfolios from Bank of America, Chase, Capital One and Discover among other large issuers.

Have you been paying down credit card debt? What's your strategy? Share your tips with me.

Follow me on Twitter: @JannaHerron

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