It seems like soooo much has happened since September, it's hard to even remember back that far. Nevertheless, it's important to review the Federal Reserve's G-19 Consumer Credit report, despite the lag factor. That's because, over time, it can be used to forecast consumer spending trends. That's especially necessary now that the all-important holiday shopping season is quickly approaching. To that point, credit card debt dropped 4.1% in September, after rising 6.1% in August.
Americans now owe $852 billion in credit card debt, which translates to $7,160 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)
Although credit card debt was down, low interest rates continue to attract borrowers for school, auto and furniture loans. This "non-revolving debt" rose 9.2% in September, setting a new record at $1.885 trillion. That's $15,845 per household on average.
This rising consumer debt helped drive stronger retail sales in Sept, benefiting car dealers, furniture stores and building supply stores. If it continues, this increase in personal consumption expenditures will boost holiday spending, starting with next week's Black Friday kick-off.
What It Means to You
As the economy starts to improve, these low interest rates will probably not last. If you're in a good place financially, this would be a great time to take out a loan, whether it's for a car, home improvement or education.
How to Reduce Credit Card Debt
- A Life Preserver in a Sea of Debt
- Making a Plan to Reduce Credit Card Debt from the About.com Guide to Credit, LaToya Irby
- More Resources for Reducing Credit Card Debt from the About.com Guide to Beginners Investing, Joshua Kennon