Americans lessen credit card use despite increased benefits

Despite a number of new enticements rolled out by lenders in November, including increased credit card reward offers, Americans continued to consider spending options other than credit cards when making purchases.

Revolving credit decreased by $4.2 billion, or 6.3 percent in November 2010, as holiday shoppers increasingly chose to use cash, check and debit cards at retail stores.

For the 27th straight month, U.S. consumers cut their overall borrowing, according to data released by the Federal Reserve in its monthly consumer credit report.

However, despite these decreases in credit use, Americans took on more debt in the form of non revolving credit, most of which was used for student loans.

Non revolving credit rose in November 4.2 percent to $1.6 trillion for the month, as students took out more money for payments. The lending increased due to a law recently passed by Congress that makes the U.S. government the primary lender to students, replacing a guarantor on private loans, The Wall Street Journal reports.

The statistics also seem to suggest that consumers continue to be cautious with new credit card offers from lenders, as they continue to avoid the payment type for purchases.

Tags: Credit card balance, Credit cards

Posted by FinanceAZ on Apr 1 2011. Filed under Credit cards. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry