Americans may be falling out of love with their credit cards, the Wall Street Journal reports, and banks seem to be returning the sentiment. As more and more consumers are delinquent on their payments, banks in turn are tightening borrowing standards, making it harder for them to extend their credit. A slowdown in consumer borrowing is already occurring, the Fed reported yesterday, and economists fear a further spending pullback.
The Fed said consumer revolving debt, after growing 11.1% in October and 13.7% in November, increased a seasonally adjusted 2.7% in December. Nearly half the people polled by Discover Card said they intended to cut spending further. Some 7.6% of credit card payments were 60 days late in December, up from 6.4% last year, further hurting banks struggling with subprime losses.