Creditnet News Story
With rule changes coming, consumers continue to pay off credit card debt
Monday, February 8, 2010
By William Davis
Revolving consumer credit dropped 9.5 percent in 2009.
As many lenders change account rules and the terms they make through credit card offers, consumers may try to make a push to pay down their credit card debt.
Recent numbers from the Federal Reserve Board support that claim, as revolving consumer credit declined at an annual rate of 11.7 percent in December. The total amount of revolving credit for the month came in at $866 billion, down from the $874.5 billion seen in November.
December's result certainly was not an anomaly, as revolving consumer credit - mostly made up by credit card debt - dropped 9.5 percent in 2009. Previous years had seen revolving credit go up, including 2008 when it increased 1.9 percent and 2007, which saw a rise of 7.8 percent.
Along with economic difficulty, many consumers may be paying off credit card debt in the face of new interest rates and fees put forward by companies that make credit card offers. Lenders are increasing fees and rates while they still can prior to the second round of regulations from the Credit Card Accountability, Responsibility and Disclosure Act.
Starting February 22, card lenders will not be allowed to increase interest rates on accounts during the first year that they are open. Rate increases will also be subject to review after a period of time.
| 
Subscribe | |
