Credit card issuance was down significantly in 2009. In hard numbers, through October issuance was down 46%. Simultaneously, debit card usage was up between 10 and 20% worldwide according to Visa and Mastercard’s Results. The trend is evident; consumers are moving away from debt and trying to make purchases out of funds they already have.
The Almighty Credit Limit
According to that WalletPop article, credit limits have come crashing back to earth as well. Consumers with credit scores greater than 760 saw their average credit limits drop from $8,000 to $4,500 on new cards. For those with a 660 score? They saw just $2,500, as opposed to $4,000 in 2007. In fact, according to an Equifax news release, 51% of new credit cards were going to consumers with credit scores over 740 versus 30% as recently as 2007.
- Credit Cards on Ice? (Paul Stocker)
Those with current active accounts didn’t fare entirely better. In the midst of the recession, 93 million accounts were closed and a total of $803 billion in credit limits was reduced. All of this coincides with a “60-days-past-due” rate of 4.62% vs. 3.62% in November 2008 (but less than 4.79% in May of last year).
The Bright Side
The bright side of all of these negative credit card numbers is the reduction in consumer debt. According to the Equifax report, consumer debt was reduced by $575 billion. This broke down to a 5.4% reduction in mortgage debt, a 7.3% reduction in credit card debt, and a 9.5% reduction in auto loan debt. All of this data meshes nicely with federal reserve statistics… consumer debt has fallen from 6.17% of disposable personal income in the third quarter of 2008 to 5.70% of disposable personal income in the third quarter of 2009. Do all of these numbers line up with your experiences? How have you changed your spending habits in the recession?
+ Go to Comments Now
Like what you see? Connect by
RSS 
• Twitter 
• Facebook 
• Newsletter 
-
http://yourdayjob.net Cameron Daniels
