Sign of the Times: Consumer Debt Plummets

Finally, some good news coming out of the Federal Reserve: the consumer credit burden dropped by a record amount in July, making it the sixth straight month that U.S. consumers have reduced their indebtedness. While that may be a bad sign for businesses—they don't care whether the money coming through their doors is borrowed or not, as long as they're getting paid—the trend suggests that the belt-tightening begun at the onset of the recession is continuing. Could it be leading to an overall shift in the average citizen's relationship with the concept of debt? Quite possibly. One thing's for certain, though—there's no need for the lenders to be panicking just yet; at the end of July, total consumer debt still stood at a whopping $2.47 trillion, of which $905.58 billion was credit card debt. And you thought the interest payments on your Amex were bad!

Associated Press/Charles Rex Arbogast

--Posted by Phil Stott, Vault Staff Writer