Decline in Credit Card Debt in the United States
Review of Markets


by Bob Chapman
The International Forecaster
January 13, 2010


Americans borrowed less for a 10th consecutive month in November with total credit and borrowing on credit cards falling by the largest amounts on records going back nearly seven decades.

The Federal Reserve said yesterday that total borrowing dropped by $17.5 billion in November, a much bigger decline than the $5 billion decrease economists had expected.

November’s $17.5 billion drop in total credit was the biggest amount in dollars terms since records began in 1943.

That represents an 8.5 percent fall from the October borrowing level. That was the biggest percentage drop since total credit declined 9 percent in May 1980.

The borrowing category that includes credit cards fell by $13.7 billion, an all-time record decline in dollar terms. The drop was 18.5 percent from October, the biggest decline in percentage terms since a 29.6 percent plunge in December 1974.

The Fed’s credit report excludes home loans and home equity mortgages, covering only borrowing that is not secured by real estate.

The drop in overall credit for 10 straight months continued a record in terms of consecutive declines, surpassing the mark of seven straight declines set in 1943 and in 1991.

Hank Greenberg, former chief executive officer at American International Group Inc., said Goldman Sachs Group Inc. is responsible for the collapse of the insurer during the economic crisis, the Wall Street Journal reported.

“It certainly wouldn’t be difficult to come to that conclusion,â€