The phrase “keeping up with the Joneses” has a special meaning. Any person keeping up their social status with the things they buy will use this phrase. This is the thing that most often causes spurts of purchasing with iPhones, flat screen TVs, riding lawnmowers and many other things. The Joneses are more concerned about getting rid of debt rather than spending on their credit cards.
Less debt within the home says the Fed
The Federal Reserve lately released new data about the levels of household debt in America. The recession came causing many to change their minds. Numerous decided it was really essential to get their debt paid off. (A little debt consolidation never hurt everyone.). According to the Wall Street Journal, consumer debt levels have fallen for seven straight quarters. In 2008, the third quarter had a pretty high peak. Fortunately, it went down 6.5 percent from then until 2010 and went down an additional 1.5 percent by the second quarter of 2010. In just 3 months, $ 178 billion of debt was paid off. That’s a lot of individuals essentially giving themselves a cash now every month.
One more small detail
The increased savings and falling debt isn’t the only thing that is happening. Delinquency rates went up with the consumer debt going down. This quarter was also the first instance of delinquent debt being reduced, which fell by 0.5 percent. However, as a corollary, bankruptcies increased by 34 percent. It seems fewer people are using pay day loans to keep up with paying for credit cards, as 272 million accounts were closed and only 161 million opened. Credit card companies aren’t doing all that well. They might need their own emergency loan.
Debt getting cut
Americans are trying desperately to get rid of their debt. Instead of getting a new card, many just pay their cards off. Regrettably, there are individuals nevertheless doing poorly. Bankruptcy is happening more often. Still, there are a lot of positive signs that people want to stay out of debt, preferring the security of cold, hard, cash.
Wall Street Journal
blogs.wsj.com/economics/2010/08/17/ny-fed-households-continue-to-reduce-debt/
