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Credit Crunch News

Credit Crunch News

The second quarter of the year saw consumers nationwide cut their overall debts and make more payments into those they still had outstanding on time and in full, according to the latest Quarterly Report on Household Debt and Credit issued by the Federal Reserve Bank of New York. During that time, the total amount of household debt outstanding across the country fell $53 billion from the first quarter of the year, to $11.38 trillion in all.

There is evidence to suggest that in the wake of the recession, consumers are once again interested in taking on different kinds of debt, but are not always being allowed to do so, according to a new study from the Federal Reserve Bank of San Francisco. Lender standards remain unnaturally tight even as the economy has improved considerably.

In the last several months, consumers have been reaching into their wallets once again and spending more on their credit cards, according to a report from MSNBC. The latest data shows that consumers are feeling more confident about their financial situations and the economy as a whole, and spending is on rise commensurately.

Many economists now believe that the large amount of credit card debt Americans held in the late 2000s is keeping the economy from making a speedier recovery, according to a report from the Wall Street Journal. Prior to the recession, the average American household's various debts amounted to about 127 percent of its annual income, leaving consumers with more to pay off, and restraining their ability to increase spending even as the economy began to lumber back toward recovery.

The total amount of consumer credit in the U.S. rose to nearly $2.43 trillion during April, even as consumers reduced the amount they put on their credit cards for the second time in the last three months, according to the latest statistics from the Federal Reserve Board. The increase was 3.1 percent more than the total of more than $2.42 trillion in March.