Thursday, June 03, 2010
Figures show renewed interest in saving, debt-reduction
Recent figures reveal that at least some consumers have taken the lessons of the credit crisis to heart, with savings rates recovering to 3.6% and the number of late payments to credit card issuers at a six-month low, according to The Washington Post.
The reality of the nation's recession has jolted many consumers into budget-consciousness. People have found new, inventive ways to save as it has become hip to be thrifty. And they're finding power and a renewed sense of control by trading their expensive lattes for home brew, buying generic over name brand, paying in cash and rethinking loans and credit purchases.
Despite the good news on the savings rate, the charge-off rate for bank-issued credit cards remains above 10 percent. The rate typically hovers around the same figure as the national unemployment rate, which is currently at 9.9 percent.
To reduce the number of credit card delinquencies "you have to get people reemployed and get incomes boosted" says James Chessen, chief economist for the American Bankers Association, a trade group.
Experts say that although consumers have made positive changes in managing their personal finances since the economic downturn, it remains to be seen whether this will remain for years to come or if consumers will revert to their old habits where spending far outpaced saving.