Well, we didn’t have anything else to do, so why not?
While 2020 was a year to forget in most respects, it appears the tumultuous year gave many Americans the opportunity to practice better budgeting. To that sentiment, it turns out many of us decided to pay off a record $82.9 billion in credit card debt, according to a Credit Card Debt Study by personal-finance site WalletHub.
This is a major accomplishment, considering that consumers have added an average of $54.2 billion in credit card debt per year over the past 10 years. Think about that. We swung from adding $54 billion to our credit card balances to paying off $83 billion. That’s huge.
Jill Gonzalez, an analyst at WalletHub, gave historical context to what we accomplished in 2020, which hasn’t happened since 2009, in the wake of the Great Recession:
“[2020 is] the second time in the past 35 years we’ve even ended the year owing less credit card debt than we started with.”
Without a doubt, things like lockdowns, travel restrictions, strict state mandates and a crackdown on entertainment and amusement saved consumers a boatload. But it’s also tough to ignore the impact of federal relief, such as stimulus checks, expanded unemployment benefits and an extended pause in loan repayments. All things putting consumers in a better position to perhaps help the economy recover even quicker in 2021.