Cited: CNN

The overall debt levels carried by U.S. citizens dropped by more than 11% in 2011, with the decrease being spread evenly across the country. Credit card balances outstanding averaged $6.576 down from $7,404 in 2010 according to CreditKarma.com, a company that compiles credit card data.

The news is something of a double-edged sword in that its always good to see that people are keeping an eye on their spending, especially if they don’t have the cash on hand, but the other side of the story is that the recession and the extremely tight lending conditions by banks have also contributed to the decline in outstanding debt. These aren’t particularly favorable indicators about economic activity in the U.S. Outstanding debt levels have been on the decline for the last couple of years however many economists believe that the trend might reverse itself this year, especially if the economy picks up a little steam.

Wisconsin residents have the lowest balances on their credit cards at $5,062, with Mississippi and Alabama close behind. However, with five of the ten poorest counties in the U.S. being in the South, this is something of a dubious distinction. Leading the charge higher were Alaska residents, who ran up balances on average of $7,937.

Mortgage debt in the U.S. held steady in 2011, with California residents having the highest outstanding mortgage balances and West Virginians having the lowest. The only debt levels that actually increased in 2011 were auto loans, rising 2% to an average of $15,504.  Taking into account all types of debt the average consumer held a total debt load of $210.236, only a small decrease from 2010 levels.

My take:

It really is a mixed bag when you look at credit card balances outstanding because some decrease might come from people being smarter about using their credit cards while other factors are probably more related to a very poor economy. Perhaps the lower debt loads will give everyone a little more room to splurge when things turn around.