American consumers are exhibiting additional caution when it comes to borrowing and buying, according to a new report. Officials with the Federal Reserve say that the use of credit cards in Pennsylvania and elsewhere has dropped, as outstanding revolving credit fell a whopping $2.42 billion between January and February of this year. That means that fewer people are carrying high balances on their credit cards.
Experts urge cautious optimism because of that news, however, as it appears that other forms of debt may simply be replacing that related to consumer spending. Student loans are among the fastest-growing sources of debt, contributing to the overall 5.6 percent rise in consumer credit since last year. Federal student loan debt continues to climb, even as consumers pay off outstanding revolving debt.
Consumers appear to have been more conscientious about paying outstanding balances, according to experts in the field, which has led to more stable financial pictures for many Pennsylvania residents. This may be short-lived, however, as reports show that banks are relaxing criteria for borrowers, yet again. Federal officials have been working to stimulate the U.S. economy by dropping interest rates to nearly zero percent during the past five years; interest rates are expected to rise next year.
Philadelphia residents who have gotten into financial trouble with credit cards may have a variety of legal options. Bankruptcy attorneys in Pennsylvania may provide information about dealing with delinquent payments and high interest credit cards. In some cases, filing for bankruptcy eliminates credit card debt altogether! Pennsylvania residents who are looking for a fresh financial start from their consumer debt may be able to receive a reprieve through the services of a bankruptcy lawyer.
Source: The Wall Street Journal, "Americans Owed Less on Their Credit Cards in February" Ben Leubsdorf, Apr. 07, 2014