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Millions of Americans are changing their habits and are becoming more responsible for their finances and their credit health. According to new data from the Federal Reserve NY, since 2008, the overall household debt— this includes mortgages, student loans, car loans and credit cards decreased by more than $1 trillion.

These changes in consumer behavior are proving beneficial for American consumers fighting debt in the form of student loans, car loans, mortgages, or other large personal or business expense.

It seems that The Great Recession and the threat of a possible recession impending are enough to put some sense in the heads of consumers looking to eliminate their debt. Here are some ways consumers have changed their habits:

Banks are Denying More Credit Seekers. According to the Federal Reserve, the falling household debt went from $12.5 trillion in the third quarter of 2008 to $11.4 trillion in the second quarter of this year. Debt reduction stems from tighter credit card standards that make it difficult for consumers with bad credit history to borrow.

Homeowners are Seeking Shorter Mortgages. "Consumers want to pay off their home down faster than ever before," a Credit-Land rep said. "Shorter-term loans are becoming more and more popular." Approximately, 34% of refinancers paid off their 30-year loan in the first quarter, and then changed to a 15- or 20- year mortgage.

Consumers are Saving More.Americans have been saving much more recently. The disposable income rate measures American savings. The figure was at 5% in July, which is four times what it was in 2005.

Overall, there seems to be an increase in the consumers who has altered their spending habits in order to live within their means. It may seem that Americans are taking more responsibility for their money, but it could just be a temporary fix.

Data has shown that previous economic downturns have not had a resonating effect on America’s spending habits. “Research has shown that once consumers get out of economic turmoil they tend to go on shopping binges,” a Credit-Land representative said. “The longer that people practice these fiscally responsible tactics, the more engrained these practices will be.”

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