The Federal Reserve's G-19 Consumer Credit report stated that non-revolving debt, like loans for auto, furniture and consumer electronics, rose 4.4%. This was after declining 4.9% in August, the first decline since 2005. Non-revolving debt is $1.617 trillion, or $5,298 per person or $13,821 per household. Note: This estimate is based on 305 million people in the U.S., an average of 2.6 persons per household, and 117 million households. (Source: U.S. Census, Population Clock; Average Household Size)
The slow growth in credit card use shows the strain that Main Street is experiencing as a result of the Banking Credit Crisis. In addition, a tightening job market and higher unemployment means fewer families can afford credit card and auto purchases. This is a reversal from the last two years, when the declining housing market caused many families to switch from home equity loans to credit cards to finance purchases. The availability of credit for personal consumption drives 70% of the U.S. economy. Declining credit purchases will probably lower the Q4 GDP growth rate.
What It Means to You
A soft economy caused by declining credit card debt is a good time to reduce your own financial vulnerability. Consult with your financial planner and develop ways to reduce your own credit card debt....and avoid becoming a statistic in the Federal Reserve’s G-19 report next month.
Related Articles
- Chicago Federal Reserve web site How to Budget
- About.com Guide to Credit, LaToya Irby Making a Plan to Reduce Credit Card Debt
- About.com Guide to Beginners Investing, Joshua Kennon More Resources for Reducing Credit Card Debt
Comments
The money that President Bush negotiated for Congress for the bailout of banks would have been better served given to the people of the United States.
If the money had been divided equally among all U. S. citizens who pay taxes they would have had enough to pay for their homes or buy one, which would have helped banks. They would have had money to buy new cars which would have helped the auto industry and they also would have had enough money to go to circuit city and star bucks.
Right now the money is being absorbed like a sponge with nothing to show or at least nothing that the people of the U. S. can see.
This concept has been passed around but why has the news outlets not suggested it?
Hi Susan,
I’ve heard this theory before, also, but $700 billion divided among 304 million people is only $2,302…not enough to even pay off the credit card debt.
Kimberly
Not every citizen just those who pay taxes or possible over 18 years of age.
I wonder what that would average out to.
Susan
Hi Susan,
According to the U.S. Census, there are 195 million adults over 25. The $700 billion would give each one $3,590…just enough to get them out of debt.
Kimberly
We are getting a much needed wakeup call from the economy, both personally and as a nation.
But if your situation is truly dire don’t count on government help. I think consulting a lawyer specializing in debt relief is the really the best approach for many people.
Really, hat’s off. Well done, as we know that “hard work always pays off.” I appreciate your article. Thanks for writing so clearly.
Great post…………………….. really helpful article. Thanks well done.
Tamara
Every person like American credit card debt grow.