Americans Reduce Debt, According to the Federal Reserve

[Jul 23, 2010.]

 

Credit Card Debt Trends Visible through Federal Reserve Statistics

Each month the Federal Reserve publishes a statistical release on consumer credit called the G.19. According to the G.19 data, for the 40 years between 1968 and 2008, revolving debt steadily increased in America. At first offered by only commercial banks in the '60s, revolving debt, such as credit card debt, became big business that spread to savings institutions, credit unions, finance companies, non-financial businesses and securitized pools. The demand for credit card debt was high and the financial industry wanted to profit.

Revolving debt, including credit card debt, hit a peak in December 2008. Since that time, Americans have been de-leveraging quickly. The amount of revolving debt in America has now back-tracked to a level unseen since the fall of 2005. Americans will continue to get out of debt until debt levels achieve a sustainable level. Lending institutions will continue to shrink their revolving debt portfolios until they perceive their risk levels are safe to their investors. Each month, as the Feds release their data on consumer credit, the story of America's transition away from a culture dependent on debt is being told.

The Struggle to Reduce Debt: Fed and Congress Trying to Help

Most economists agree that there are still many American citizens who need to get out of debt. The Federal Reserve, as banking regulator, and the US Congress have recently enacted new regulations and laws designed to control lending and help people get out of debt. For example, the Federal Reserve now requires credit card companies to show how long it takes to pay credit card debt in full paying only the minimum payment vs. the payment required to pay the debt in three years. The US Congress passed the Wall Street Reform And Consumer Protection Act as part of their efforts.

Free Debt Consolidation Advice

Independent of the government, there are also private businesses, as well as non-profit agencies, that offer free debt consolidation advice. If you are struggling to get out of debt, take time today to contact a specialist. You can apply for a debt consolidation loan here. Join the many Americans who have reduced debt now.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.