Woman holding multiple credit cards

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$779,000,000,000. Three commas. Nine zeroes.

That's the total size of credit card debt Americans hold on their personal balance sheets. Taking it at face value, the assumption behind such a large, increasing number is that credit card debt is spiraling out of control as Americans haphazardly spend themselves into an unescapable hole. 

But the truth is, that may not be the case. In the video segment below, The Motley Fool analysts Nathan Hamilton and Michael Douglass talk about a few signs that suggest Americans are actually managing their credit card debts better than any point in the past decade.

Michael Douglass: Here at The Motley Fool, we love exploding myths, whether they be myths about the stock market, myths about personal finance, things you've heard that are just plain wrong, and as it turns out, things with credit cards are going a lot better than I think many of us, me included, have been led to believe.

Nathan Hamilton: Yeah, you've got to really look under the hood and see what information is there, because if you look at reports, they'll say credit card debt has reached 779 billion, and it's increasing.

Douglass: And that's a big number.

Hamilton: Yeah, huge number.

Douglass: You hear that and you're like, "Oh, bad."

Hamilton: Yeah, and I don't know what the average is per household, but it's obviously a big number, and you see credit card debt increasing. We've also got to put it in context of what's actually happening. Are people managing their debts better? Are they paying off balances monthly? Are they late on their payments? And the research you've come across recently in past quarters suggest that maybe we're actually getting better at managing credit card debt, which would go against what many other people are saying.

Douglass: Mm-hmm (affirmative), yeah, and one of the things that was big for me is credit utilization is down to 23% from high 20 percents during the financial crisis. So what that means is people using less of the debt that's available to them in any given month which is undoubtedly a good sign that they are better managing it in general.

Hamilton: Yeah, because if you think of it, overall debt divided by your credit limit, that's down from high 20s to the 23%, and that's telling me OK people are actually looking at their debt and saying, "What do I have available?" "How do I manage it well?" "How do I stay within my budget?" Perhaps that's what's working better, and actually sticking to it, and maybe our personal financial statements are getting better. No doubt that has happened since the financial crisis, but it is moving in a positive direction.

Douglass: Mm-hmm (affirmative), and also 90 day delinquencies have fallen by about half since the financial crisis, which is a great sign again that the picture is improving. That's not to say that things are necessarily amazing or perfect. They aren't. Anyone being behind on credit card payments is bad for them, right? That's not a good place to be, but the fact is that fewer people are in it than have been in the past, and that is a very positive sign.

Hamilton: Yeah, and you almost have to look at the numbers beyond what we've done here, and say of the people that have credit card debt, what are their delinquencies? What are their credit utilization ratios? Because as we look at it, we're talking broadly, averages for Americans and there may be a different story as you dive into each segment. Subprime borrower versus prime credit card borrower.

Douglass: Or even state by state.

Hamilton: Exactly.

Douglass: There are a lot of different ways, but the fact of the matter is, the picture's a lot more muddled than I think a lot of the financial media would lead us to believe.

Hamilton: Absolutely.

Douglass: And that's an important thing for us to think about, and again that there are some legitimately positive signs out there, and that's something also-

Hamilton: Celebrate it.

Douglass: Yeah. Something to be happy about or at least encouraged by.

We've got a lot of information, particularly if you're in debt, you know a balance transfer card is sometimes, not always, but sometimes a really good option to get a 0% APR for 12 or 15 or even 21 months while you're paying off that debt, so you're not enriching somebody else while you're paying off your debt. We've got a lot of information about balance transfer cards and other credit cards for different types of borrowers at fool.com/creditcards. We've also got a lot of information there about debt and about budgeting, and about how to think about all that, so that if you're in debt and are able to get out of it, how you kind of avoid getting back into it. So again, that's fool.com/creditcards. We'll see you there.