Credit card debt falls to lowest level in 8 years

The amount consumers owed on their credit cards in this year's second quarter dropped to the lowest level in more than eight years as cardholders continued to pay off balances in the uncertain economy.

The average combined debt for bank-issued credit cards - like those with a MasterCard or Visa logo - fell to $4,951 in the three months ended June 30, down more than 13 percent from $5,719 in the same period a year ago, according to TransUnion.

The credit reporting agency reported Wednesday that it was the first three-month period during which card debt fell below $5,000 since the first quarter of 2002.

Credit card debt remained the highest in Alaska, but slid 7 percent there to $7,148. A total of 22 states recorded debt higher than the national average.

Residents of Alabama paid off the most debt, dropping their average balance by 27 percent to $4,753.

While Nassau and Suffolk counties saw the average credit card borrower debt drop as well, both counties' averages were above the national figure. Nassau's average credit card debt fell from $5,865 in the first quarter to $5,711 in the second quarter. In Suffolk County, the figure decreased from $6,030 to $5,855.

More borrowers also made payments on time. The rate of cardholders past due by 90 days or more fell to 0.92 percent in the second quarter, from 1.17 percent last year.

That's the first time the delinquency rate has been below 1 percent since the second quarter of 2007, before the recession, said Ezra Becker, director of consulting and strategy in TransUnion's financial services unit. The rate fluctuates during the year, he said, but the improvement is more evidence that consumers are working to make sure their credit cards remain in good standing.

With Keiko Morris