Friday, September 07, 2012

Another side of the credit crunch

Gillian Tett assesses the fall in credit card debt and use of plastic. It should not be a great surprise given the increase in the savings rate.
"Yes, you read that right. Although Americans are (in)famous for their addiction to credit card debt, that love affair is cooling, or being forcibly cooled. By the middle of this year, the number of credit card accounts in circulation had tumbled to 383m, 23 per cent below its 2008 peak, and fresh applications for credit were declining too. Put another way, while cards are still being flogged to consumers (and even sometimes marketed, via direct mail, to pets), not all Americans are saying “yes”."
Another way to look at this is from the supply side.  As part of the 'credit crunch' and cut back in advances to risky credits.

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