Americans reduce credit debt in third quarter
Consumers continued to take steps to cut their credit card debt in the third quarter, according to a recent survey by the Federal Reserve Bank of New York.
Consumer debt was estimated at around $11.6 trillion at the end of September, down 0.9 percent, or $110 billion, from June’s figures. The monthly report aims to track the average household debt and credit of American consumers.
Economists cited the high unemployment rate as the primary reason for the debt reduction, Bloomberg reports.
“Americans are borrowing less and paying off more debt than in the recent past,” Donghoon Lee, a senior economist at the New York Fed, told Bloomberg. “This change, which we continue to study carefully, can be a result of both tightening credit standards and voluntary changes in saving behavior.”
The report showed signs that Americans are improving personal finances, the news source says. Credit card delinquencies declined, while the percent of debt in delinquency fell 11.4 percent. The number of new bankruptcies also fell during this time.
Despite the reductions, Arizona, California, Nevada and Florida continued to have high foreclosure and delinquency rates.