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April 10th, 2009

Fed Says Credit-Card Debt Down in Feb.

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The Federal Reserve reported this week that credit-card debt fell significantly in February. In their monthly release the Fed reported that revolving credit, a commonly-used gauge of credit card debt, fell by 9.7%.

This dramatic decrease suggests that either two scenarios occurred in February. While it’s common during a recession that cash-strapped consumers rely on credit cards to get by, the Fed’s report suggests that consumers may have begun to hunker down with their finances. Instead of depending on plastic, Americans are saving more and spending less.

The other possibility — for which there is some evidence — is that credit card companies have begun “weeding out” unhealthy customers through higher interest rates and minimum payments, lower credit limits, and tougher lending restrictions.

Readers: Have you been able to pay down your credit-card debt or is it growing?

(hat tip: TopFinanceBlog & U.S. News)

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2 Responses to “Fed Says Credit-Card Debt Down in Feb.”

  1. The Best Way to Reduce Your Credit Card Debt | Personal Loan Lenders, Resources, Information Says: April 17th, 2009 at 1:17 am

    [...] HSH Financial News Blog » Blog Archive » Fed Says Credit-Card Debt … [...]

  2. Avoiding The Dangers of Debt Consolidation Loans | Personal Loan Lenders, Resources, Information Says: June 6th, 2009 at 6:38 pm

    [...] HSH Financial News Blog » Blog Archive » Fed Says Credit-Card Debt … [...]

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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