After rising 2.9% in March, credit card debt dropped 1.4% in April. This was another indication that shoppers are losing confidence again in the economic recovery. This is a resumption of the longest decline in credit card use since the Federal Reserve began keeping records in 1943. (Source: Federal Reserve, G.19 Release, June 7, 2011)
At this point in the recovery, this is a another bit of unwelcome bad news. Why? Credit card debt boosts personal consumption, which drives 70% of the economy. A decline would have been better if it had occurred during the 2005 bubble, when the economy needed to have the brakes put on.
Even with the drop, Americans have a huge credit card debt load. In April, it was $790 billion, or $6,639 per household. Note: This estimate is based on 119 million households or 308.7 million / 2.59 persons per household. (Source: U.S. Census, 2010 Data; Average Household Size)
On the other hand, Americans continued taking out loans for auto, furniture and consumer electronics. This non-revolving debt rose 5.3%, to $1.63 trillion, in April. This translates to an additional $13,697 of debt per household. It's been increasing since early 2009 thanks, in large part, to an increase in government education loans.
What It Means to You
The best way to improve your earning ability is with a college degree. Research shows that the unemployment rate for college graduates is only 4.2%. If there is any way you can go tocollege, take advantage of government programs now. They could soon be a victim of Congressional budget cutting.