Credit-Land.com Report: Consumer Debt Increase Could... - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Credit-Land.com Report: Consumer Debt Increase Could Signal Economic Recovery

Credit-Land.com Report: Consumer Debt Increase Could Signal Economic Recovery

Credit-Land.com Report: Consumer Debt Increase Could Signal Economic Recovery
The content is accurate at the time of publication and is subject to change.

According to a recent report from the Federal Reserve, consumer debt in the United States increased for the fifth consecutive month. This increase occurred amid a decrease in consumer credit card debt. Economists speculate this could be a sign of an ongoing economic recovery from the recent years of recession. With the announcement on Tuesday from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis regarding a decrease in trade deficit in February, these positive trends will depend on how the economy copes with rising oil and food prices.

Consumer Debt on the Rise

Total consumer debt in the United States increased by a seasonally adjusted annual rate of 3.8% in February. This is the largest increase in debt since June 2008. Consumer debt increased by $7.62 billion to about $2.42 trillion, up from the $2.41 trillion consumers owed in January. This increase in debt is specifically of non-revolving credit, including one-time loans for various purchases, such as automobiles, mobile homes and school tuition. This kind of debt suggests consumers are beginning to feel more secure with the future of the economy and are making more big-ticket purchases.

Decline in Credit Card Debt

Despite the report of rising consumer debt, overall credit card debt decreased. In February, credit card debt, called revolving credit, dropped for its second consecutive month by an annual rate of 4.1%, or $2.71 billion. In addition, there is a decrease in credit card delinquencies, which means consumers are doing a better job of paying their bills on time. Bank-issued credit card delinquencies dropped to their lowest rate of 3.28% in the last quarter of 2010, compared with the 3.64% in the previous three months, according to the American Bankers Association.

What This Means for the Economy

Economists believe these figures suggest greater consumer stability; they are more capable of paying off credit card bills on time and are taking out more loans with increased confidence in the economy. An increase in debt is better for the overall economy because consumers are purchasing more and saving less. With employment on the rise and a Social Security tax cut, consumers aren’t as worried about saving money and are more confident in the future economy. Although food and gas prices have been on the rise recently, hopefully consumers are in a more secure financial position to deal with these challenges.

Decrease in Trade Deficit

Today the U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the trade deficit decreased in February. The goods and services deficit decreased to $45.8 billion from $47.0 billion in January. Although this narrowing deficit is a positive sign for the economy, analysts had anticipated the deficit to decrease more substantially to $44.5 billion in February. Also, with rising oil and food prices, economists fear this trend could be short-lived.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Discover Cuts Price Protection Benefits from Credit Cards

Posted: August 20, 2018

If you have a Discover card and like the Price Protection benefit that comes with it, you might want to take advantage of it sooner than later. Discover has decided to do away with this benefit. This benefit will no longer be part of your ... Continue reading
The New Citizens Bank Cash Back Plus World MasterCard

Posted: August 17, 2018

Citizens Bank has rolled out their new Cash Back Plus World MasterCard, offering cardholders 1.8% cash back when they go shopping. This is an upgraded version of their previous card. With this new version, cardholders can earn unlimited ... Continue reading
Bonus for the IHG Rewards Club Premier Card Gets an Upgrade

Posted: August 16, 2018

Have you been thinking about applying for the IHG Rewards Club Premier credit card? If so, you may want to check it out now because they just increased the bonus - bumping it up from 80,000 points to 100,000 points. Cardholders get the ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 15.74% - 25.74% based on your creditworthiness
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!