According to the Federal Reserve, New Jersey residents and American consumers as a whole reduced credit card spending and debt in July, choosing to pay for goods and services with cash instead. American consumer credit fell $3.28 billion in July, far below the $9.1 billion dollar increase that Wall Street economic analysts had anticipated. Credit card spending had generally grown since the middle of 2010 when the nation started to recover from the Great Recession. The July decline in credit card debt and spending was the first seen since August 2011.
Some economic analysts attribute the decline in credit card debt and spending to American consumer pessimism about the strength of the U.S. economy. Other analysts think it’s more a matter of financial companies extending credit more stingily. Still others say that Americans could be cutting back on credit card debt because their incomes have increased.
While the actual reasons are tough to pin down, New Jersey residents and the country as a whole have cut back on credit card spending, but most believe that the sluggish economy is the primary reason, especially because of the recent decline in hiring. Because the economy has been bearish in the last several months, the federal government may try harder to invigorate the economy and reduce unemployment.
The decline in credit card spending and debt sends mixed messages as to the signs of a U.S. economic recovery. New Jersey residents who are struggling to make ends meet can seek the counsel of a bankruptcy attorney who may be able to offer solutions to help them resolve their financial troubles.
Source: New Jersey Newsroom, “New Jersey Shoppers Give Credit Card Debt the Axe,” Stacey Bumpus, Sept. 12, 2012