Debt Settlement Blog

Credit card debt continues to calculate negatively for consumers straddled with high rates.  With delinquencies soaring the banks have been forced to cut available credit line for consumers across the country.  Consumer credit fell $10.3 billion in the U.S. in June, or at a 4.92 percent annual rate, to $2.5 trillion. It was the fifth straight month of decline, as banks cut limits on credit cards and some consumers remained wary of borrowing money for big purchases.  Home foreclosures have not slowed down and fears of more job losses have contributed to the credit reduction from banks and lenders

Economics blog Calculated Risk has this chart (it gets bigger each time you click on it) showing that in percentage terms the declines in consumer credit are the worst in at least the past four decades:

Looking at subcategories within the Federal Reserve report, credit-card debt fell $5.04 billion, or 3.8%, to $1.59 trillion — a record 10th straight monthly drop in credit card debt. And non-revolving credit, such as auto loans, fell $5.04 billion, or 3.8%, to $1.59 trillion.  Doesn’t seem consumers are ready to save the economy quite yet.  — Article written by Mathew Padilla