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July 01, 2010

  • News:  Equifax; Consumer Confidence Strengthening

    The recession was hard on all Americans as well as other countries across the globe. It does appear, however, that the economy has begun to turn around and consumers are having less difficulty meeting financial responsibilities. Equifax, Inc. one of the top three U.S. consumer credit reporting bureaus told Reuters that the delinquency rate on home mortgages, home equity loans, and credit card accounts fell during May for the fourth consecutive month. Americans are spending more with their credit cards while maintaining on-time payments, however, credit cardholders continue to spend less than they did prior to the recession.

    Even though credit card customers are doing a better job at paying debt, young college graduates are faltering. According to the report, student loan delinquencies of 60 days or more increased to 11.4 percent in May; up by 1.6 percent in April and 4.7 percent from the same time last year. However, U.S. lenders indicated that credit card delinquencies decreased to 1.8 percent; a 7 percent decrease from April and a whopping 22 percent from the same time last year. According to Dann Adams, President of Equifax U.S. Consumer Information Solutions, Americans have enjoyed a "love affair" over the past decade with credit which appears to have been broken off. Adams believes the nation will not see any greater change until consumer confidence increases even further and the nation's job situation improves.

    Credit card customers are also carrying less debt on their accounts which overall fell by 13.2 percent from the same time in 2007. April's savings rate increased to 3.6 percent up from the 3.1 percent in March. Overall, U.S. card account balances have decreased by $690.5 billion down 6 percent from a high of $11.5 trillion in October 2008; the lowest it's been since August 2007.Card companies are also trimming down on credit availability. Many lenders slashed credit and closed high risk accounts prior to the enactment of new legislation. This move has also added to a reduction in the nation's overall card debt.

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