Denver Credit Card Holders Paying Down Debt Faster

By: EconomyWatch Content Team   Date: 27 January 2010

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Without doubt, the Denver credit card holder deserves to be applauded.  The reason is that when looking at the national pay-down rate for credit cards, Denver cardholders pay down their cards faster than anyone else does.  That means on a national scale, people with a Denver credit card account are more responsible for keeping balances paid down or paid off.  However, what makes this revelation so unique is that people in Denver actually have more credit card debt!

There are a number of benefits associated with a Denver credit card holder paying down balances quickly.  For starters, the amount of interest a person pays would be significantly lower.  With this, less interest is being added on to the principal balance of the card so the balance decreases quicker and money is not being wasted solely on interest.  After all, the quicker the principle is paid down the less interest is charged, saving the cardholder a tremendous amount of money that could be spent in a better way.

Another benefit of a person with a Denver credit card account paying down balances fast is the reporting to the credit bureau.  To the three reporting agencies, this type of action is seen as positive.  Therefore, the more balances are kept low or paid off altogether, the better the individual’s FICO score would be.  Then, the higher the credit score, the easier it is for that person to secure credit and with that, he or she would be offered the lowest available interest rate.

Reports show that people with a Denver credit card had a 7% decrease rate in balances during the third quarter whereas the decline nationally is 4%.  Going back to the amount of debt that people in Denver carry, the average for the city is just over $8,100, although that number has also been declining.  When compared to other cities, this balance is approximately $1,000 higher.[br[

As mentioned, when a person with a Denver credit card continually pays down the balance and does it quickly, the credit score improves.  On this note, studies show that of all metro areas within the United States, Denver had the highest percentage for improved credit scores.  This past September, Denver had a percentage of 42% but nationally, the percentage is around 39%.  However, nationally 29% of improved credit scores actually decreased and of the remaining 32%, there was no change at all.

Good credit is something that every person in this country should strive for because it provides what experts call “buying power”.  With a high credit score, securing a mortgage loan, car loan, student loan, American Express credit card, and so on is easy.  However, for each loan or credit card secured, people with excellent credit also get the lowest interest rates, fewest fees, and best bonus programs.  Therefore, maintaining a high score rewards the individual for managing his or her Denver credit card responsibly.

When looking at the national average for credit scores, the numbers were 672.  These numbers were a combination of the three reporting agencies to include TransUnion, Experian, and Equifax, with numbers then averaged out.  However, for people with a Denver credit card account, the average credit score was 677, which is actually quite impressive.  The reason that people in Denver pay down credit card debt faster than others is not understood but more cities should follow suit.


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