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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

November credit card debt drops record amount

Maybe Americans are serious about spending less and saving more.

The Federal Reserve announced moments ago that the revolving credit held by Americans -- that's credit cards -- fell to its lowest level since the Fed started keeping records in 1943.

Borrowing fell $17.5 billion in November, more than three times what forecasters expected. And this was November -- you know, the month before Christmas?

This is a good news/bad news announcement. It's good news because carrying too much debt is what got us into this mess in the beginning. It's bad news because if consumers cut back spending too dramatically and too quickly, it could put the brakes on any halting economic recovery we've got going, as about 70 percent of U.S. GDP is based on consumer spending.

This marked the 10th straight monthly drop in consumer credit.

Miller Tabak equity strategist Peter Boockvar writes: "To put the last decade of credit growth into perspective, nominal personal consumption rose 55% (same increase as overall GDP) while consumer credit rose 61% over the same period. Thus highlighting how dependent on credit the U.S. became rather than on savings in generating growth."

-- Frank Ahrens
Follow me on Twitter at @theticker

By Frank Ahrens  |  January 8, 2010; 3:40 PM ET
Categories:  Fed Reserve , The Ticker  | Tags: Federal Reserve, consumer credit, credit cards  
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Comments

It appears that banks Obama bailed out are turning on him and insuring that the TEA PARTY REVOLT will not fund Obamaland.

Credit is being cut to both opening and exsisting businesses alike.

Cut credit = bad credit scores.

The whole financial system will not support any success in Obamaland.

It appears they are all waiting for the USA to start up again.

Obama = toxic

Posted by: dottydo | January 8, 2010 4:00 PM | Report abuse

People should cut up their cards and send them back to the banks. Let them find other suckers to pay 29% interest.

Posted by: John991 | January 8, 2010 4:03 PM | Report abuse

unemployed??

is money tight???

well you should feel much better

see, obama is giving $100 BILLION to foreign countries for global warming

could be enough for YOU to take a hawaii vacation, although you would have to fly in "cattle class"

barack hussein obama
mmmmm mmmmmm mmmmmm

Posted by: ProCounsel | January 8, 2010 4:10 PM | Report abuse

Hey Dottydo:

The banks were bailed out under Bush...never let facts get in the way of your opinion.

Posted by: rstpierre | January 8, 2010 4:29 PM | Report abuse

AussieJack wrote:
Even the dumbest of the dumb should understand the Government can’t create sustainable jobs and that only private enterprise, both small business and large, can.

So, with this in mind, put yourself in the position of a company CEO, and ask yourself if, under the current administration, you would start hiring new employees when you’re looking down the barrel at;

1. Unknown, but sure to be severe Health Care costs
2. Card Check, the prospect of Unions dictating your company policy
3. Cap and Trade with its higher cost of energy
4. Higher company, payroll and personal Taxes
5. A Government that intrudes on every aspect of your business
6. An administration that does not understand the basic elements of business
7. An administration that denounces the system of capitalism
8. An administration seeking to redistribute your wealth.

Facing that sort of future, any self respecting CEO would neck himself before hiring one single employee that was not 110% essential to the well being of his business.

You have to face the facts, the huge number of people now unemployed or underemployed, estimated to be between 20 and 30 million, is a number that’s going to be around for a long, long time. It’s a number that can only grow when inflation hits and the US$ crumbles even more.

Wake up America, you’ve allowed your great country to be taken over by so called intellectuals, that have never done an honest days work in their miserable lives, and worse than that, you have let them destroy it.

They cannot fix it; they’re incapable, only you, the people, can fix the once great USA.

Posted by: ProCounsel | January 8, 2010 4:42 PM | Report abuse

I see ProCounsel and dottydo are here, too. I wonder if the two villages they are from are interviewing for village idiot now that these two are posting on WaPo 24/7? Online sure beats the street corners they used to screech and foam at the mouth on.

Posted by: steveboyington | January 8, 2010 5:10 PM | Report abuse

How quite the news media and Americans forget that this total earth burning disaster to our Country and Citizens was encouraged , sponsored and created by the Bush / Cheney / Republican administration.
They hope the democrats would receive FULL blame for their criminal and corruption to our democracy , freedom , military , economy , jobs and citizens.

Of course if we do not vote out the republicans which have been elected on the democrat ticket , than we are going to be in trouble..

Donation to democrats and republicans by the Global Monopolies..

http://www.opensecrets.org/industries/indus.php?ind=F03

Posted by: Sporty1 | January 8, 2010 5:24 PM | Report abuse

obama beat us to the job
+++++++++++++++++++

I see ProCounsel and dottydo are here, too. I wonder if the two villages they are from are interviewing for village idiot now that these two are posting on WaPo 24/7? Online sure beats the street corners they used to screech and foam at the mouth on.

Posted by: steveboyington | January 8, 2010 5:10 PM

Posted by: ProCounsel | January 8, 2010 5:28 PM | Report abuse

This is a credit correction that has been a long time coming. Since the 80's (probably taking the lead from Reagan) owing money for anything and everything has been a way of life for too many Americans.

Posted by: rousehouse | January 8, 2010 5:34 PM | Report abuse

obama was on the edge of the grand canyon admiring himself on his ipod watching his speeches

when someone slipped and fell off the cliff

"do something" the crowd shouted to Obama

the victim splattered on the rocks at the bottom of the canyon, dead.

"Let me be clear, In my Administration this mans rapid decline stopped," Obama said.

Depression Obama--its why YOU may lose YOUR job

Posted by: ProCounsel | January 8, 2010 5:35 PM | Report abuse

Before Arianna Huffington suggested we withdraw from the toxic banks, we had already taken steps to bail out of Wachovia/Wells Fargo.
We opened a new account at a local credit union for educators, since my husband teaches high school now.
Also, we have one credit card that has been pulling a lot of stunts including raising our rate -- it's a Citibank Mastercard.
When we called them, we got a smartaleck response from Customer Service, so I told them:
"You don't want to help us?
Fine.
Two can play this game, you know.
We'll quit using your card and pay you off."
The man just laughed.
We've quit using it and we're paying it off as quickly as we can.
Once paid off, we'll open a new card associated with our new bank.
Next year, we plan to buy a hybrid electric/gas Toyota Prius.
We're getting with the program.
I think our new president and administration has done better than could have been expected, even with all the poor jobs news.
We have to be patient.
It took a long time to get us in this mess; it's going to take a long time to bring us back up to speed.
BTW:
I think Congress needs to correct a major bad decision made during the Bush years:
It needs to return to exemption of medical bills in the bankruptcy law.
It's a crime to compel people to go bankrupt just because of overwhelming medical tragedy.

Posted by: Judy-in-TX | January 8, 2010 5:36 PM | Report abuse

rstpierre,
Don't waste your breath trying partisan with me.
TEA PARTY REVOLT is Independent Party who think the RNC and DNC are corrupt.
The Majority had no representation when the bailouts were voted in.
Voter registration Numbers are very real.

Obamaland = GOP and DEMs attempting to breech the US Constitution for tyranny

The USA is the American people
In Obamaland vs the USA
Obamaland is in real trouble.

The people are on sabbatical until they are out of power.

I this Congress places President Biden tomarrow and opens all ethics violations of hidden Public Official intel, there would be no problem.

No Money for Obamaland will continue for as long as it takes.

Posted by: dottydo | January 8, 2010 7:58 PM | Report abuse

steveboyington,
When you wise up the voter registration is to the Indpendent Party.

Good luck loser.
You are bankrupt and still acting like your rich.

Posted by: dottydo | January 8, 2010 8:01 PM | Report abuse

My hunch, the banks and credit card companies have destroyed themselves by stealing from their customers instead of servicing loan contracts and collecting a fair rate of interest.

The next generation has seen the damage inflicted upon their parents and wants nothing to do with plastic.

Good luck rebuilding your customer base.

Posted by: knucit | January 8, 2010 8:15 PM | Report abuse

Given that we Americans can't depend on our government and financial institutions to do the right thing, we are being smart in reducing our consumer debt. I could care less about the banks and credit card companies.

Posted by: LittleRed1 | January 8, 2010 10:23 PM | Report abuse

hey conservatives, independents, and intelligent democrats:

We can stop obama/democrat healthcare if we elect Scott Brown to Dead Ted Kennedy's Senate seat. No filabuster proof senate for the democrats. Send some money to asap:

http://www.brownforussenate.com/

Thanks from a patriot trying to save our country from the obama communist democrats.

Posted by: charlietuna666 | January 8, 2010 10:30 PM | Report abuse

Its too bad that most forgoing comments reflect shallow political bias rather than insight on the article.

The banks have done Americans a great diservice by announcing steep increases in interest rates on good accounts. That makes people stop and think about charging any purchases - exactly counter to what will bring us out of recession in an economy that is 70% consumer spending. Get rates to 5% or 8% and people will use cards and the economy will revive sooner.

The banks get money from the Fed at 0% and want credit cards to be 23% or more.

Posted by: jmdavidson | January 9, 2010 12:25 AM | Report abuse

Welcome to the new normal.

Now if we could only get our idiot politicians in Wash. D.C. to do the same the USA would survive and thrive!!!

Savings -> Capital Investment -> Innovation -> Jobs !!!

Posted by: cautious | January 9, 2010 1:52 AM | Report abuse

So good of Aussie Jack to give our American friends the benifit of his obviously superior economic knowledge.
But wait- has Jack looked ar Aussie stats?
Is he aware that the per capital debt( personal debt) in Oz is bigger than in the U.S.
The Ponzi economy worked just as badly in Australia as it did in the U.S.
Australians were just as deluded as Americans and believed that wealth is created by debt funded over appreciation of assets rather than production.
Australia can thank China and early Government intervention for not slipping into recession.
The worry now is that Australian are still hooked on plastic fantastic.
Somehow globally the debt problem will need to be addressed and that is and will continue to be painfull.
Yes, business large and small does create jobs but real business not the "funny money type" Like it or not Governments have to be part of the equation- it was business that gave us the GFC and Governments (i,e taxpayers) which saved us from a worse fate.

Posted by: Charles15 | January 9, 2010 2:25 AM | Report abuse

The comments to this entry are closed.

 
 
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