Debt Free News

Borrowing down but overdrafts are rising

January 18, 2007

When it comes to reading debt free news, many times it’s daunting. But, if our debt free readers out there take these articles to heart – it will help many of them in the long run. By reading the following report, you can learn about debt issue and avoid more personal debt, getting a debt consolidation loan or even bankruptcy.

In the month of December 2006, the amount of debt amassed on credit cards (credit card debt) fell. This is due to the fact that many in debt have looked for alternatives to getting into more debt. In fact, while some reports say the holiday spending season was big one, according to this report today, a lot of consumers stayed away from credit card debt.

It is being reported in financial news today that credit card debt (new lending), fell by about $300 million from the amount reported in November 2006 (the month before). This impressive debt figure goes to show that many consumers steered clear of over spending and additional credit card debt.

During the year 2006, it is being reported in debt free news that the amount outstanding on credit cards debt fell tremendously. This is an interesting development as many of us debt free advocates have hoped it would be. However, on the flip side, even though the owed credit card debt levels fell, many consumers found themselves mucking it up by raising their debts on new personal loans and overdrafts. So, consumers are continuing to create more debt (not becoming debt free), but they are not using their credit cards to do it on the whole.

Now, even though today’s new debt report is showing the overall picture for loans and overdrafts was fifteen percent less than it was in the year 2005. Then, by the by the end of 2006, consumers turned and borrowed nearly another $4.3 billion.

In this new debt free report, one economist goes on to say that over spending consumers were seeking alternative ways to take out loans at cheaper rates, such as debt consolidation loans even. Higher personal debt levels, higher loan interest rates, along with increased lack of jobs (unemployment) and a notable rise in pension concerns are creating more need for many typical consumers to attempt to make better their personal financial situations. SO, other than creating more credit card debt with higher rates, they are seeking out lower rates by getting other personal loans and even debt consolidation loans.

Thusly, as the report states, the higher interest rates go, the larger the danger that an increasing amount of consumers will be faced with debt trouble and personal debt problems.  

According to the new debt free report, even though the debt issues may not be a major overall hazard to the economy, it will create some preventive impact on the improvement for consumer spending and debt creation. New growth win nit be stimulated.

But even though the debt report shows the above information, never fail, consumers still have a need for secured loans. This is due to the fact that mortgage debt is up and still increasing as of December 2006. This is a good thing since rate rose in November 2006. We will continue to watch these trends for our debt free readers out there.

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