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 jack-d-ripper
Joined: 2/25/2008
Msg: 1
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Saving up Credit cards down...........






Fed: Credit Card Debt Down Almost 10 Percent
April 08, 2009 10:44 AM ET | Kimberly Palmer | Permanent Link | Print

The Fed released its latest consumer credit report yesterday afternoon and revealed that revolving credit -- which generally refers to credit card debt -- dropped by a whopping 9.7 percent. That means people are paying off their debt and also taking less on to begin with. Could this mean that we are finally getting smart about our finances?

In some ways, the drop is surprising, because when times are tough, some people may need to rely more heavily on emergency money sources, such as credit card debt. But in general, most people have the opposite reaction, and start clamping down on their spending. During past slowdowns, Bureau of Economic Analysis data shows that people typically start saving more and spending less, as consumers are doing now.

Access to credit also plays a role, of course. Credit card companies have been weeding out their bad customers through higher interest rates, lower credit limits, and less access to credit altogether.

http://www.usnews.com/blogs/alpha-consumer/2009/04/08/fed-credit-card-debt-down-almost-10-percent.html


 sorot
Joined: 10/18/2008
Msg: 2
Credit Card Debt Down Almost 10 Percent
Posted: 4/9/2009 9:21:29 PM

The Fed released its latest consumer credit report yesterday afternoon and revealed that revolving credit -- which generally refers to credit card debt -- dropped by a whopping 9.7 percent. That means people are paying off their debt and also taking less on to begin with. Could this mean that we are finally getting smart about our finances?


Smarter, yes, really smart - no. They wanted to make a regulation to enforce every credit card company to put in bold letters a statement like

"if you pay your minimum payment, you will finish your balance in ////// yrs, by paying overal $/////."

If one has say $10,000 revolving 14.99 apr and is doing $100 mimimum payment, he is paying about $100 a month interest, it's like a car payment for just having a balance. When I started my business I put everything on my credit cards, and know what it means, and how hard it is to get out from that trap.
 MotownSingleGuy
Joined: 12/20/2008
Msg: 3
Credit Card Debt Down Almost 10 Percent
Posted: 4/10/2009 5:45:19 AM
How much of the reduction was due to bankruptcies and other write-offs/write-downs? Without knowing that, it's impossible to gauge whether this is good news or bad.
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