“The amount of consumer revolving credit, which is mostly credit cards, plunged by another $24 billion in May, the Federal Reserve said Wednesday. This costly form of debt is down more than $100 billion since hitting a record high in February and is now below $1 trillion for the first time in nearly three years.”
So it’s dropped about 10% since May. That’s a good sign!
What that may mean, though, is that we aren’t going out on weekends spending $$ at bars and restaurants. I know that’s true in our house.
So as the cc debt gets paid down, it may be that more and more of whats outstanding is debt that is at risk of default.
I don’t know, I’d say that while credit card debt might be down it doesn’t necessarily mean credit card or debit card usage is down. For instance, many of the places I go really discourage cash now, especially the small time eateries. I guess this is to try to remain as contactless as possible.
I haven’t had to use cash for the past few months.
And ordering things online hasn’t gone down.
Maybe what this means sis for some people , some expenses have gone down. For example, folks in my household are probably spending 1/10th what use to be spent on gas since we no longer need to drive everyday, and the few days we do drive, we aren’t stuck in traffic. Just an example.
Also, working from home, people probably are eatting out less during the day during work hours.
Some might have gotten rid of daycare expenses. Some might have cut out all the expenses associated with kids and kids activity since they are all closed.
My cash reserves have gone way up because many of the things I use to spend money on are not applicable during covid. But my credit card usage has gone quite up.
I pay cash for everything I can use cash for … I like being part of the privacy economy as long as it lasts, and it seems like transmission of COVID via porous surfaces is a nonexistent issue. Remember, you can’t spell “demonetization” without “demonization.”
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