Creditnet News Story
Credit card debt falls during third quarter and October
Monday, December 7, 2009
By Danielle Robson
Consumers continue to concentrate on trying to pay off debts in what has been a tight lending market.
Though mailed credit card offers have seen a recent upswing, consumers have remained focused on paying off their debts, according to recent statistics from the Federal Reserve.
The Fed reported that overall consumer credit dropped at an annual rate of 3.25 percent during the third quarter. Revolving credit - which is made up mostly by credit card debt - dropped at an annual rate of 7.25 percent during the quarter.
For October, the Fed reported that revolving credit dropped at an annual rate of 9.3 percent, while overall credit decreased 1.75 percent. However, nonrevolving credit increased during the month at a rate of 2.6 percent.
While consumers concentrated on paying off credit card debt, lenders increased the potential availability of credit in October. A report from Mintel Compremedia noted that mailed credit card offers increased 34 percent during the month and totaled 180 million, up from the 134 million mailed in September. However, a report from Reuters noted that many of the offers concentrated on more affluent consumers as card companies try to hedge lending risks.
