While there has been a lot talk lately about the economy looking up, there is one area that seems to be slower to recover: consumer spending.br /br /In fact, the newest figures from the Federal Reserve suggested that Americans paid down credit card debt and avoided adding new debt during June.br /br /The total amount of borrowing decreased by $10.3 billion that month. Revolving credit, a category which is mostly comprised of credit cards, dropped by $5.3 billion that month, according to the Fed’s data. br /br /That adds up to a seasonally adjusted annual drop of 4.9 percent, which is higher than what most analysts were expecting, according to the Wall Street Journal.br /br /Non-revolving credit, the majority of which is auto loans, also declined during June by approximately $5 billion.br /br /There are a number of reasons that outstanding borrowing is declining. One reason may be that consumers are responsibly paying down credit card debt. br /br /Also, because the unemployment rate is still fairly high and families are worried about job cuts, they may be avoiding additional spending.br /br /A third factor contributing to the decline is that credit has been more difficult to obtain since the recession began, with lenders looking for higher credit scores than in the past.br /br /The trends we are seeing are going to continue and get more intense by the end of the year, consumer advocate Gerri Detweiler told the Los Angeles Times. As credit reform gets closer, banks are working very hard to reduce their risk profile, and that’s causing some pretty dramatic changes for consumers.br /br /According to the Fed’s data, consumer credit has shrunk every month since August 2008, except for a brief uptick in September. br /
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