 TITLE: Credit Card Debt in 2020: Balances Drop for the First Time in Eight Years CONTENT: Credit Card Debt Saw Unprecedented Drop in 2020\n-----------------------------------------------\nSince 2019, outstanding credit card debt has dropped by 9%, bringing the total for Q3 2020 to $756 billion, according to Experian data. This drop represents over $73 billion in balances that consumers have paid down in the past year—despite a recession.\nSource: Experian\nAside from the fact this occurred during an economic recession, the decrease is notable because it marks the first drop in any type of debt since 2013. Until 2020, all debts—including mortgage, auto, personal loan, student loan and credit card—had been increasing year over year since 2014.\nThe expectation that consumers would rely more heavily on revolving debt during an economic crisis is not far-fetched. But reality shows that three-quarters of the way through 2020, U.S. credit card debt is at the lowest it's been for quite some time.\nIt's likely at least part of this drop in credit card debt can be attributed to consumers' access to cash and debt relief help from federal economic stimulus measures enacted by the Coronavirus Aid, Relief and Economic Security (CARES) Act. Provisions in the CARES Act, such as the suspension of student loan payments and a one-time stimulus check of up to $1,200, may have given consumers the wiggle room necessary to pay down their balances.\nWhile balances may have dropped, the number of consumer credit card accounts has grown over the past year. Consumers in the U.S. opened 12 million new credit card accounts since 2019, according to Experian data. And while this is less than the 21 million accounts added in 2019, it's still significant given larger economic conditions.\nUnlike in past years where balances grew in tandem with new accounts, 2020 is the first of at least 14 years (the oldest point in history included in this analysis) where consumers added new accounts but decreased their overall debt burden.\nThe past trend showed that new accounts typically brought increased debt. But in the case of 2020, the new accounts are either not being used to rack up high new balances, or consumers are aggressively paying down their debt enough to offset the balances being added to newly opened accounts.\nSource: Experian END