While we applaud and support any improvement in consumers’ ability to control spending beyond their means, we see first-hand that not everyone is sailing in smooth financial waters. Many consumers are overwhelmed with debt.
SAN MATEO, Calif. (PRWEB) February 13, 2019
Total consumer credit has risen above $4 trillion for the first time, according to the Federal Reserve’s February consumer credit release showing consumer credit figures for December. Yet the fact that consumer borrowing grew at a slower rate in December than in previous months may signal some optimism in consumer spending habits, according to Daniel Cohen, managing editor of Bills.com®, a resource providing simple tips, advice and tools to help consumers make smart financial decisions.
Revolving credit – primarily credit card debt – rose 2 percent in December, after increasing 5.6 percent in November and 11.7 percent in October. Nonrevolving credit rose 6 percent in December, after increasing 7.2 percent in November and 6.5 percent in October. Nonrevolving debt includes outstanding credit for items such as vehicles, education and unsecured installment loans. The consumer debt data does not include home mortgages or home equity borrowing.
“We see the decelerating growth in revolving debt as good news, given that the period covered the ‘prime time’ of a holiday shopping season marked by robust consumer spending and strong retail sales,” says Cohen. “The figures may indicate that consumers budgeted and used some of the rise in wages seen in 2018 to cover holiday costs.”
Cohen cautions, however, that the slower rate of growth in consumer credit does not necessarily indicate permanent changes in overall financial health. “While we applaud and support any improvement in consumers’ ability to control spending beyond their means, we see first-hand that not everyone is sailing in smooth financial waters.” Many consumers, he says, are overwhelmed with debt. Moreover, according to a Federal Reserve survey of senior loan officers, banks are starting to tighten access to credit. “Consumers need to take this time, in early 2019, to focus on eliminating credit card and other high-interest debt.” The average credit card interest rate reached another new record high last week, at 17.55 percent.
“In 2019, Bills.com is dialed in to improving consumers’ financial health,” Cohen emphasizes. “Educating consumers about the relationship between spending, saving, borrowing and planning is critical not only to individual financial health, but the financial health of families, communities and the country.”
Bills.com is part of the Freedom Financial Network®, a family of companies whose products and services provide innovative solutions that empower people to live healthier financial lives. The Bills.com resource site provides simple tips, advice and tools – including the Bills.com debt relief calculator – to help consumers make smart financial decisions.
Headquartered in San Mateo, California, Freedom Financial Network also operates an office in Tempe, Arizona, and employs more than 2,200. The company has been voted one of the best places to work in both the San Francisco Bay area and the Phoenix area for several years.