Smart Borrower Blog

Archive for the ‘Credit Card Debt’ Category

Credit Card Use Jumped in December

U.S. consumers pulled out their plastic in greater numbers for purchases in December, according to information from the Federal Reserve Tuesday. Total credit debt increased substantially as well. Revolving credit, such as credit card debt, grew by $2.76 billion in December to $800.98 billion, after rising $5.58 billion in November. Non-revolving credit, driven by student loans and auto loans, posted a $16.55 billion increase, to $1.697 trillion, also following a major jump in November. Total consumer credit debt rose by $19.31 billion in December, a striking increase compared with a prediction from economists surveyed by the Dow Jones Newswires that... more »

Consumer Borrowing Makes Biggest Jump since 2001

Consumers borrowed money at a higher rate in November than they have in a decade, according to the latest report from the Federal Reserve. Total consumer borrowing grew $20.4 billion in November to $2.48 trillion, posting the largest monthly gain since November 2001 when loans increased by $28 billion. The new total is almost back up to pre-recession levels and significantly above the September 2010 decrease of $2.39 billion. Credit card borrowing and other revolving credit accounts jumped up $5.6 billion, the largest increase since March 2008 and the third consecutive monthly gain. Auto loans also rose $14.8 billion, almost... more »

Consumer Borrowing, Credit Card Use Up in October

Consumers continued to borrow more money in October, according to the latest figures from the Federal Reserve, and the trend could suggest either progress or danger. Total consumer credit grew by $7.6 billion to $2.457 trillion, outpacing September’s $6.88 billion increase. Americans have upped their spending and borrowing for 12 of the past 13 months, with August being the notable trend-breaker. Borrowing during that month fell by the most in 16 months. Still, in general U.S. consumers have been taking on more debt. Non-revolving credit, including student loans and car loans, rose 5.3 percent, or $7.28 billion in October. This... more »

Consumer Borrowing Makes Surprising Jump

Consumer credit borrowing in the U.S. increased substantially in September from the previous month, spurred on by rises in student and auto loans. Borrowing rose by $7.39 billion to a total of $2.542 trillion, according to the Federal Reserve. This was a particularly surprising increase after consumer credit fell $9.68 billion August, and analysts only predicted a growth of $4 billion for September. The increase was apparently led by a jump in borrowing for items like cars and tuition. Non-revolving credit, which includes both those types of loans rose $8.01 billion in September to a total of $1.662 trillion. Revolving... more »

Student Loan Debt Reaches Record Levels

Total student loan debt in the U.S. has surpassed national credit card debt, according to new figures from the Federal Reserve Bank of New York. New student loan funds borrowed last year grew to $100 billion dollars, a record high, and now total outstanding student loan debt has reached $1 trillion for the first time in history. Full-time undergraduate students borrowed an average of $4,983 last year, according to the College Board. That figure is more than double the average from 10 years ago, after adjusting for inflation. In the wake of the current economy, default rates on student loans... more »

Credit Card Lenders Look To Subprime Borrowers Again

After a few years of dramatically tightened lending standards, some banks and credit card companies are starting to reach out again to borrowers with less-than-perfect credit scores. According to data from credit bureau Equifax, new credit card accounts to subprime borrowers, those with a credit score below 660, rose 64 percent in the past year to 5.4 million during the first half of 2011. That growth dwarfed the 27 percent growth rate of total credit cards issued through June. Banks “want to grow and you can’t grow if you’re only lending to super-prime and prime customers all the time,” said... more »

Consumers Make Progress With Timely Credit Card Payments

In the latest quarter, consumers stayed current on their credit card payments at an impressive rate, according to data from credit reporting bureau TransUnion. Of all credit card accounts during the second quarter of 2011, only 0.6 percent were delinquent by 90 days or more, representing the lowest rate in 17 years. This number is down 19 percent from the first quarter this year and down 35 percent from the same period of 2010. A major reason for the falling rate is simply that Americans are shedding their credit card debts. The New York Federal Reserve Bank said recently that... more »

Lending Standards Eased Slightly Again in Latest Quarter

Banks loosened their lending standards on several types of loans during the past three months, according to the Federal Reserve’s survey of senior loan officers . Those finding the easiest access to loan capital are large and medium-sized businesses, as well as car buyers. In the survey, which polled 55 domestic and 22 foreign banks, 21.8 percent of all banks said that they eased their lending standards for large companies in the third quarter from the second. And 20 percent said they had made it easier for auto loan applicants to get approved. “In spite of the equity market volatility,... more »

Colleges Lose Money on New Credit Card Rules

In the wake of the 2009 Credit Card Act, also known as CARD, colleges and universities have felt a dramatic drop in their income from their school-affiliated credit cards. The Federal Reserve recently reported that the total number of credit cards issued through colleges and universities fell 17 percent in 2010. In terms of income, schools earned $73 million in 2010 from these marketing deals, a 13 percent drop from $84 million in 2009, according to Bankrate.com. The decline in sign-ups for these cards is attributed to the new rules put in place in February 2010, including a major one... more »

Credit Card Late Payments Hit Pre-Recesion Lows

The Associated Press reported last week that late payments and defaults on credit cards are falling to lows not seen since the beginning of the economic meltdown. For accounts behind 30 days or more, American Express posted an annualized late payment rate of 1.6 percent of all its balances in May, which is a vast improvement from its rate from before the Great Recession. JPMorgan Chase reported a late payment rate of 2.66 percent; the last time its rate was so low was in the middle of 2006. Discover Financial Services came in third with a rate of 2.88 percent,... more »