CREDIT CARD 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 » Consumer debt declines in august with credit card balances

Consumer debt declines in august with credit card balances

October 20, 2010 | Updated on October 20, 2010
Add to Favorites:
The content is accurate at the time of publication and is subject to change.

August saw the decline of consumer borrowing even as Americans cut down on the balances of their credit cards making their intentions clear about not taking on more debt even as unemployment rates continue to climb. Credit failed to even reach the revised July target of 4.09 billion dollars to come down to 3.34 billion dollars according to the Federal Reserve report that was released in Washington. This is the 24th consecutive month that the credit card debts have declined.

The rate of unemployment meanwhile has reached 9.6% in August gaining for the first time in 4 months. Reports from economists show that it rose in the last month. Consumer spending which contributes 70% to the economy is declining. According to chief macro strategist at Wells Fargo Advisors in St. Louis, Gary Theyer, the consumers are spending money with a touch of caution and their debts are down. It is considered to be in the long term although it is holding back the economy a bit currently. Meanwhile Bloomberg news surveyed 39 economists and the median forecast predicts a 3.5 billion dollars decline in the credit card debt and non-revolving loans. The estimates have ranged from a decline of 7.5 billion dollars to 1.8 billion dollar gain. The standard and Poor't 500 Index has also dropped a bit by 0.2 percent touching 1,158.22 in New York at 3:16 pm.

Another interesting bit of development is the drip in the applications for unemployment benefits which fell last week unexpectedly to their lowest lever over the last 3 months which shows that the labor market is thawing.

The number of jobless claims has dropped to 445,000 last week, marking a drop by 11,000. This number is the lowest since July 10th. As per the report from Fed, even the revolving debts that include credit cards have dropped to 4.99 billion dollars in August. Meanwhile loans for cars and mobile homes which make up the non-revolving debt has increased by 1.65 billion dollars during the month although, debt secured by real estate including home equity aren't tracked by the report. The delinquencies on credit card also fell as most credit card companies have posted good numbers. Companies like Discover Financial Services have seen improvements in spending as well. All the top credit card issuers have reported lower delinquencies in their regulatory filings in August. As per economists surveyed by Bloomberg, enough jobs haven't been generated to keep up with the growing labor force.

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:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
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!