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Report: More Americans are paying off credit card debt

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CHARLOTTE – New government numbers show more Americans are paying down credit card debt, a process economists call deleveraging.

"You're trying to remove debt that you had, pay off loans, don't take out any new loans," said Harry Bowen, who teaches economics at Queens University in Charlotte.

According to numbers from the Federal Reserve Bank of New York, household debt declined by $110 billion in the first three months of the year, down a percent from the end of 2012 and off significantly from its peak during the recession.

"I do see less and less debt," said Brett Boner, a financial planner at Carroll Financial in Charlotte. Boner encourages clients to rid themselves of high-interest debt like credit cards and student loans.

"We do think paying off debt and getting rid of it as quickly as possible is a very good thing if your interest rate is above four percent, five percent," said Boner.

With interest rates for mortgage and auto loans at historic lows, it costs less to borrow, though fewer people can qualify.

"You got to have good credit,” Boner said. “You got to have income. And it's not as easy as it used to be."

Bowen said the economy is still struggling because salaries haven't risen.

"We need discretionary income,” he said. “And in the last four or five years, a lot of people don't have discretionary income."

Although the consumer confidence index hit a five year high on Tuesday, it's still well below pre-recession highs.

"It's not anywhere near the level that would sustain the idea that, 'OK, we'll go ahead and run up another thousand dollars on the credit card' or “we'll go buy that new car,”" Bowen said.

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