Consumers Remain Cautious About Credit Card Use
For the third straight month, Americans charged less to their credit cards in September, according to the Federal Reserve G19 statistical release published yesterday.
In September, overall consumer borrowing increased but revolving credit, consisting primarily of credit card debt, dropped 1 percent to $789.6 billion.
Consumers have remained very cautious about taking on more credit card debt since the economic downturn began. In fact, revolving credit has decreased in 32 of the past 36 months. It declined for 27 consecutive months from September 2008 through November 2010.
Actions by both consumers and issuers have led to these consistent decreases in credit card debt. Consumers are still hurting and have cut back on their credit spending. They can’t afford to pay the steep interest penalties associated with their credit cards balances. Issuers have also made it hard for people with average or poor credit scores to get a new credit card, and credit limits have not been significantly increased for existing cardholders.