American credit has decreased and has continued to do so since 2008. Industry experts state that Americans are getting wise on their debt decisions, tending to turn away from debts and already paying them up. Is that true?

The National Debt amounts to 2.46 trillion dollars, with 864.4 billion dollars of credit card debt a part of it. The average credit card balance debt is around $5400 while the average number of credit cards per family is eight to nine cards. With 1.21% delinquency rate of borrowers and a lowered credit debt by 8%, who says that Americans can’t anymore pay there debts?

Experts attribute this to the falling cash balances in the pockets of the citizens. The recent recession has made them victims of lay-offs and mortgage foreclosures, thus making them more in need of cash.

So why do they quit debt, despite the necessity of money? Because, they were denied by their credit card companies, that’s why. Credit card companies have found it more useful to reduce their default risk by taking off that risk. What does it mean?

A person with no credit card history or bad credit history is usually marked together with risky borrowers. Since they are risky they tend to stack up in the default risk of the credit card, meaning they are eyed with caution because they can’t be fully trusted yet. But these business companies do their business strategies like any business could. Their distrust has forced them to deny the applications submitted by these people. Easy risk-loss, right?

Reasons about consumers knowing their credit limitations and abandoning credit cards may be true. But due to their need of cash, which they don’t have in hand that much, they have to ask for credit. The only problem is they don’t have anywhere to get the money from so they have to abandon credit and just increase their efforts to raise enough money.

There are still ways for people to get credit. For instance, there are credit cards for people with no credit history available called the secured credit cards. Consumers have to come up with enough security deposit for their application to be approved though. It shows that the credit card companies are still trying to lower the delinquency rate through restrictions like this.

Today, money is not always available. It is a limited resource, in a sense. Similarly, credit seems to go along with it.

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