Consumers Reduce Their Credit

It appears as though consumers are ready to declare their independence from credit cards. At least for now. A recent release shows that consumer debt reduced in July by billions. It is clear that the recession has forced many people to wake up and realize that things in their personal finance lives need some changing.

July’s numbers mark the longest consecutive decrease in consumer credit since 1991. This is quite the accomplishment for the American people. Credit card debt alone dropped by $6.11 billion. Clearly, consumers are rethinking their spending habits.

Silver lining to the recession

The fact that so many people are choosing to a) stop getting into more debt and b) start paying down existing debt is rather encouraging. Indeed, it is a clear sign that people might be taking stock of their finances and making serious changes. The recession has shaken us up, reminding us that the boom times can’t go on forever.

Of course, the real challenge is to maintain these good personal finance habits beyond the recession. The recession has helped us see the error of our ways, and begin to take steps to rectify the situation. Now it will be necessary to apply these financial principles as the recovery comes. Perhaps a gradual recovery will be best for individuals, allowing them the time to cement their good financial habits.

Image source: Daylife