Americans are using less plastic, staying more current on their debts and building their savings.
This post comes from partner site LowCards.com
The monthly Consumer Credit report released yesterday by the Federal Reserve shows credit card debt fell for the 19th consecutive month.
Revolving credit, which is primarily credit card usage, declined $8.5 billion in April. This indicates that consumers continue to pay off their credit card debt as issuers keep tight limits on lending.
Revolving credit has fallen an impressive $138 billion since October of 2008, from $976.1 billion to $838.0 billion.
The report also showed that consumer spending slowed in April and savings rose for the first time in four months.
This drop in credit card debt is good for consumers and issuers. Each of the six major credit card issuers reported small declines in the delinquency rates from March to April, indicating that consumers are getting debts to manageable levels and pose less risk of default. Issuers seem to have maintained the stringent credit card approval rates to minimize their risk.
“The economic downturn seems to have had an impact on how consumers are using their credit cards, at least in the short term. It is a good sign to see the revolving credit numbers continue to drop. Hopefully, we are getting back to a mentality where we only buy what we can afford to pay for,” says Bill Hadekopf, CEO of LowCards.com and author of The Credit Card Guidebook.