Almost 97 percent of credit card accounts are paid on time. Martha and Tommy Yandell are part of the trend toward improved improved credit. Much of their debt had been accumulated after they bought a house, Martha had a second child and lost her job at a local day-care center, and Tommy was between jobs as a graphic designer. It's just exciting. We've actually been able to save some money.
Credit counselors agree that more people are able to pay their bills on time.
But they do not believe it is because they are taking on less debt. Carol Kurth, education coordinator for Credit Counseling Centers Inc. in Farmington Hills, Mich., thinks families are not more debt free but simply trading in one type of debt for another. For example, many more are taking out home equity loans, sometimes for 125 percent of the house's value, to pay of their credit cards. Robert W. Morley, general manager of Credit Counseling Centers of America in Dallas, said the improvement could evaporate if the economy sours. If they're downsized, they continue to spend at the same rate and put it on their credit card.