RobertB
September 10th, 2007, 06:32 PM
Consumers Turn to Credit Cards in Wake of Unavailable Home Equity Lines
Monday, September 10, 2007
WASHINGTON — Consumers kept charging at a rapid pace on their credit cards in July although their overall borrowing slowed a bit. The Federal Reserve reported that consumer credit rose at an annual rate of 3.7 percent in July, down from a 5.9 percent growth rate for consumer debt in June.
The slowdown reflected a big drop in borrowing in the category that includes auto loans. The category that includes credit cards saw an increase as consumers continued to turn to their credit cards to finance purchases now that home equity lines of credit are becoming harder to obtain.
During the housing boom, when sales of both new and existing homes set records for five consecutive years and prices were rising sharply, many homeowners tapped the rising value of their homes to finance their spending by taking out home equity lines of credit. However, now with home sales plunging and home prices stagnant, home equity lines of credit have become less available. That has pushed consumers back to relying more on their credit cards to finance purchases.
http://www.foxnews.com/story/0,2933,296337,00.html
Monday, September 10, 2007
WASHINGTON — Consumers kept charging at a rapid pace on their credit cards in July although their overall borrowing slowed a bit. The Federal Reserve reported that consumer credit rose at an annual rate of 3.7 percent in July, down from a 5.9 percent growth rate for consumer debt in June.
The slowdown reflected a big drop in borrowing in the category that includes auto loans. The category that includes credit cards saw an increase as consumers continued to turn to their credit cards to finance purchases now that home equity lines of credit are becoming harder to obtain.
During the housing boom, when sales of both new and existing homes set records for five consecutive years and prices were rising sharply, many homeowners tapped the rising value of their homes to finance their spending by taking out home equity lines of credit. However, now with home sales plunging and home prices stagnant, home equity lines of credit have become less available. That has pushed consumers back to relying more on their credit cards to finance purchases.
http://www.foxnews.com/story/0,2933,296337,00.html