In February, credit card debt dropped 13%, after rising 2% in January. Consumers owe $858 billion, or $7,271 per household.
The 12-month decline is still the most since the Federal Reserve began keeping records. The falloff is a result of 22 months of job losses and tightened bank lending standards. (Source: Federal Reserve, G.19 Release, April 7, 2010)
Loans for auto, furniture and consumer electronics fell 1.6%. Non-revolving debt is $1.59 trillion, or $13,447 per household. Note: This estimate is based on 118 million households or 307.6 million / 2.6 persons per household. (Source: U.S. Census, Population Clock; Average Household Size)
The availability of credit for personal consumption drives 70% of the U.S. economy. As Americans put down the plastic, it will slow GDP growth.
What It Means to You
A recession combined with 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.
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(Photo Credit: Scott Barbour /Getty Images
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