However, September’s data suggests that applying for a credit card or other type of loan has not yet become completely passe.
The newest data from the
Federal Reserve reveals that consumers increased their annual rate of borrowing during that month by 3.2 percent.
Non-revolving borrowing – such as student and car loans – rose at an annual rate of 4.4 percent, while credit card debt increased by 1.2 percent.
Does this mean that all of the news claiming that consumers are locking up their wallets and backing away from accumulating new debt is a lie?
Probably not, Wachovia’s Adam York told CNN Money. He pointed out that in September – when the data was gathered – the credit crunch had still not yet reached full throttle.
“The trend is still clearly downward,” he said. “Consumers are going to continue to cut back on their spending we think and, accordingly, there will be a reduction in credit use.”
For some, cutting back may be necessary for effective debt management. But it can also be difficult, particularly as the holidays approach.
Some experts suggest that if you are careful about how you spend, you will still be able to prevent your borrowing from spiraling out of control.
Consumer advocate Adam Levin told the El Paso Times that people would be wise to shop around for bargain – and start early to get the best deals.
“Every dollar you save is another dollar in your pocket that can help insulate you” from the current economic turbulence, he added.
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