It looked all too promising for credit card-happy consumers, didn’t it? Recently, as of July 2011, it appeared that plastic-wielding customers were just too eager to whip out their cards and charge their purchases to whatever account they were able to.
The economy may be very ill at ease right now, but this news doesn’t help matters. At one point, consumers were okay with spending an extra $12 billion on credit. And as for non-revolving credit (i.e. think of auto loans and the like), well, it went up some $15.4 billion.
Well, the most breaking data from the Federal Reserve shows that consumers had a reality check or change of heart. As in, the spending on credit cards fell by some $3.44 billion, as of July.
Overall the decline was priced at, as observed by the website Consumer Affairs, “$792.5 billion.”
That represents a good 5% in prices.
Generally, consumers have been fearful about spending with credit cards, ever since the economic crisis/recession got well underway. 2009 came and in that year, credit card companies awakened to their stark reality and began lowering credit limits…as well as going all out and closing all accounts.
May and June showed a burst of consumer spending with credit cards, but apparently that was a trend not meant to last long. Economists that watch consumer spending habits believe July’s results actually show a glimpse back to normal activity, as discouraging as that might sound.
But, on a promising note, according to the Fed’s figures, credit card debt was at its highest as of 2008 at $957.5 billion. As of right now, the rate for credit card debt stands 17.2 percent lower. That in itself shows that, regardless of how much consumers are using their credit cards, they are at least doing a much better job of paying off their debts.