Fed Says Credit-Card Debt Down in Feb.by Tim Manni
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?