Posted on Friday, 9th July 2010 by Rebecca Ortiz
The amount of credit card debt in the country continued to drop, according to a monthly report from the Federal Reserve Board.
According to the central bank, revolving credit dropped at an annual rate of 10.5 percent in May, continuing a trend that has been since last year. Revolving credit is mostly accounted for by debts on cards.
A drop in revolving credit could mean a number of things. While it is an indication that people are trying to pay off their credit card debt, it could also mean that issuers have had to charge off more bad accounts. That means some people aren’t able to pay off their debt.
However, a recent report from the American Bankers Association noted that delinquencies on credit card debt declined during the first quarter, falling to 3.88 percent of accounts.
While revolving credit dropped, so did nonrevolving loans, which fell at an annual rate of 1.4 percent. Combined, overall consumer credit dipped 4.5 percent. Last year, total credit fell 4.4 percent, according to the Fed.
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Tags: Drop, Drop May
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