Credit card use is down, but long-term debt is still growing fast
According to a recent report by The Vanguard Group, consumer credit increased only $8 billion in March, the smallest monthly increase in eight months.
The report shows that despite significant slowing in credit card spending — the biggest decrease since July 2012 with a drop of $1.7 billion — other more long-term forms of debt such as student loans and automobile debt almost tripled from 2004 to 2012. Education debt is the only type of debt to continue rising through the Great Recession and is quickly approaching the $1 trillion mark.
The study reports that the likely reasons for the slowdown in short-term debt include the pinch of tax increases, including the halt of the 2 percent Social Security payroll tax holiday, and concern for a looming economic slowdown.
By combining both credit card and nonrevolving debt, the study shows that consumers have about $2.8 trillion in total installment credit debt.
In comparison, the Federal Reserve Bank of New York reported in February 2013 that mortgage debt in the U.S. has reached $8.03 trillion.
- 30 Christmas gifts that keep on giving
- The 37 most charitable celebrities
- 3 tips for traveling cheaply
- 16 charitable activities you can do with your...
- Sony hack adds to security pressure on companies
- Why you might want guaranteed asset...
- Questions and answers about traveling to Cuba
- Survey says parents spend $532.87 a month to...
- Is brand loyalty the new religion? 6
- US consumer prices fall in November 4
- Insurers ease 'Obamacare' deadline 3
- Sony hack adds to security pressure on... 3
- Amazon does not have to pay workers for... 2
- 5 purchases you should never put on a... 1
- Why many millennials lack the money to... 1
- Constantly changing online prices stump... 1