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Kimberly Amadeo

Holiday Shoppers Relied Less on Credit Cards

By February 11, 2013

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Credit card use dropped 5.9% in December, according to the Federal Reserve's G-19 Consumer Credit Report. This followed November's .8% drop. Instead, shoppers relied more on cash, debit cards and layaway than credit cards to fuel holiday gifts. In addition, families continued to take out loans, as non-revolving debt rose a record 11.4%, following a 9.7% increase in November.

Despite the drop, Americans owed a hefty $849.8 billion in credit card debt, or $7,140 per household. They also owe $1.928 trillion in school, auto and furniture loans, or $16,200 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 average, American households owe $23,346 in consumer debt (remember, this doesn't include mortgages). This is more than $2.78 trillion, even more than before the recession. However, the composition is low-interest non-revolving debt instead of expensive credit card debt. This is a healthier base for economic growth. It's also proof that the Fed's quantitative easing is working to boost the economy. (Source: Federal Reserve, G.19 Release, February 2013)

What It Means to You

Credit is becoming more available, especially for auto, furniture and school loans. If you need a loan, and you can get a low fixed rate of interest, take it. It won't be available this time next year.

How to Reduce Credit Card Debt

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Comments

February 20, 2013 at 1:23 pm
(1) Chan says:

The whole American population lives on a debts and it is not wonder USA is top debt country in the world . Even though the American people knows to make good money at the same time they don’t know to pay the money for the life comforts they enjoy.Each American knows how to live on others money.Even though America is the top economy in the world but they don’t know to pay for their living, and live debt free.

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