Consumer credit pulled back for the seventh straight month in August, led by a steep decline in credit card usage, a government report said Wednesday, as unemployment soared and cash-strapped consumers continued to limit spending. The total amount of credit outstanding fell by $12 billion, or a 5.8% annual rate, to $2.463 trillion in August, according to the Federal Reserve. "Credit is being squeezed on both sides," said economist Sean Maher of Moody's Economy.com, adding that lending standards at banks remain tight and consumers are pulling back on their debt. "I was a little surprised that nonrevolving balances didn't increase slightly due to the surge of vehicle sales driven by the Cash for Clunkers program," said Maher, who expects the rise to show up in September's report. While declining consumer credit delays economic recovery in the near term, Maher said it's ultimately a positive development because consumer debt levels were too high and the savings rate was too low. John Penrose, the Shadow Consumer Minister, said: "These announcements do not go far enough to address the culture of problem debt and do not seek to change consumer behaviour or encourage more responsible borrowing."
Summary Box: Homeowners see credit scores sink after signing up for mortgage relief AN UNWELCOME SURPRISE: Homeowners who enroll in the Obama administration's loan modification program can see their credit score dip by as much as 100 points. That makes it harder ...
US President Barack Obama's historic health care legislation, set to face a make-or-break vote on Sunday, would also reshape the way Americans pay for famously pricey college educations. Along with buying a home and setting aside cash for retirement, paying for higher ...
Homeowners see credit scores sink after signing up for mortgage relief Some homeowners who sign up for the government's mortgage assistance program are getting a nasty surprise: Lower credit scores. For borrowers who are making their payments on time but are on ...
Compliance with a new law aimed at regulating mortgage modification and foreclosure prevention, a runaway industry rife with scammers, is off to a slow start, causing concern for those on the front lines. Only 50 companies statewide have applied for the states ...
Congressional Democrats on Thursday trimmed their original student loan plans, reduced spending for community colleges, and eliminated early childhood money from a broad rewrite of a college aid bill piggybacked on to fast-track health care legislation. The student loan measure would be ...
Banks reduce their borrowing by average of $2.24 billion from Fed's emergency loan program Banks borrowed less from the Federal Reserve's emergency lending program over the past week in a further sign that the strains from the financial crisis are fading. The ...
Rates on 30-year mortgages edge up, but remain below 5 percent as Fed prepares exit Mortgage rates held below the 5 percent threshold for the third straight week as the Federal Reserve prepares to end a program that has kept rates at ...
Californians losing their homes face big tax bills unless Schwarzenegger, lawmakers compromise What should have been a legislative afterthought is threatening to become a financial purgatory for thousands of California taxpayers hit by the housing crisis. With less than a month until ...
MMI offers tips for understanding the CARD Act While only 10 percent of respondents in a recent Money Management International (MMI) survey believe students should use credit cards to finance college costs, many students get their first credit card while they are ...
New court data show surge in cases related to consumer issues in fiscal 2009 The number of new cases in federal courts related to consumer issues surged in the year ended last Sept. 30 as Americans battered by the recession fought foreclosures ...
