Two reasons 1Q21 U.S. credit card debt dropped $49 billion, second-largest drop ever

Total household debt rose by $85 billion in 1Q21. But credit card balances shrunk by $49 billion in 1Q21, the second largest decline in the history of the time series, which begins in 1999. The largest decline was $76 billion in 2Q20, when lockdowns were in full force. But the 1Q21 decline stands in sharp contrast to retail recovery as the U.S. economy reopens and travel resumes.

Here are two possible reasons…