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What Happened to the Revolving Credit Card Balances of 2009?
We track the disposition of revolving credit card balances that existed as of March 2009 ? the peak of outstanding balances in our data set ? over a four-year period. We find that 75 percent of those balances had been paid off or charged off by February 2013. Charge-offs played a much smaller role in balance reduction than did paydown: 27.8 percent of balances were charged off, while 72.2 percent were paid down. Charge-offs accounted for a much larger share of balance reduction in the riskiest quintile and almost none of the reduction in the least risky quintile. After stratifying by risk ...