Recent Consumer Credit Trends from the Fed
Preferred Financial Services, Inc reviews and discusses recent financial data on consumer credit released by the Federal Reserve…
Andover, Massachusetts April 20th 2010 – Preferred Financial Services has reviewed the most recent consumer credit report released by the Federal Reserve in early April and has found some interesting and thought provoking information in it related to how Americans are spending their money in this economy.
As expected, with the still faltering economy and high unemployment rate consumer credit has decreased quite substantially as American families are still worried about the economy and their personal finances. This drop in credit tends to signal that consumers do not believe the economy in general and the job market in particular has turned the corner completely. If they did, the credit use by consumers should be trending upwards not downwards as consumer spending increases.
The numbers also show that Americans are relying less and less on revolving credit and more and more on non revolving credit which once paid off can not be used again. Typical examples of this are car loans and student loans. Revolving credit, which is typical credit card debt, dropped an astounding 13% in February. Non revolving debt only dropped 1.3% on an annual basis in February. This disparity leads us to say with a high degree of certainty that Americans continue to limit their personal non essential expenses in these tough economic times.
The report goes on to state that total consumer debt has decreased by close to 40 billion dollars from January to February. Before this recession Americans had peaked their personal debt at close to 2.6 trillion dollars in the 4th quarter of 2008. As the economy soured and Americans reigned in their debt, it has dropped to 2.45 trillion. The continued drop also signals that Americans are paying off their debt and not creating new debt. This is very important as it could signal a fundamental shift away from living on credit to a more responsible financial landscape.
Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.
For more information, please visit: www.pfsdebtrelief.com
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Gabriel Tavarez
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